Qatar ‘Kicks Off’ Investment in Foreign Power With Greek Plant

Qatar’s acquisition of a 25 percent stake in Greece’s Heron II power plant “kicks off” a drive by the world’s biggest exporter of liquefied natural gas to invest in electric power abroad, the country’s energy minister said.

“The power sector is growing steadily worldwide,” Mohammed Saleh Al Sada said at a press conference in Doha late yesterday. “We have already built capacity internally here in Qatar, but we are interested in extending our investment elsewhere.”

The push to invest in power production abroad will last for the “coming few years,” he said, after state-controlled Qatar Petroleum International Ltd., called QPI, signed the agreement yesterday with GEK Terna SA securing its stake in Heron II. The deal came two months after Qatar created Nebras Power, a $1 billion fund that will invest in water and power assets abroad. The Heron II purchase was made by QPI because negotiations started before Nebras was created, Al Sada said.

Qatar is investing in energy assets abroad after its own LNG exports leveled off amid a moratorium on further development of the country’s North Field, the world’s largest gas reservoir. In April, Centrica Plc and QPI agreed to buy Canadian natural gas fields from Suncor Energy Inc. for C$1 billion ($966 million).

As the biggest LNG supplier to Europe, Qatar already supplies the gas used to power electric generation plants across the continent. An investment in the power sector would allow the country to increase its earnings from the delivery of that energy to gas importers.

QPI paid $58 million for its stake in Heron II, according to an e-mailed statement from GEK Terna today. The companies also agreed to form an alliance for investments in Greece and southeast Europe, according to the e-mailed statement.

Nebras Power

Nebras Power, which was announced May 20, will invest in power generation, water desalination, cooling and heating projects abroad. The new fund will be 60 percent owned by the publicly-traded Qatar Electricity and Water Co. Qatar Holding LLC, the foreign investment arm of the sovereign wealth fund, and QPI will each hold a 20 percent stake.

Qatar used hydrocarbon revenue to invest $60 billion a year abroad from 2008 through 2012, the International Monetary Fund estimates. Qatar Holding, the foreign investment arm of the Qatar Investment Authority, bought stakes in Volkswagen AG, Credit Suisse AG and Tiffany & Co. In February, it said it set up the $12 billion Doha Global Investment to be listed in the emirate.

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