We remember in the early 1990s a Qatari deputation came to Turkey’s door to sell their liquefied natural gas. Before thinking of how the project might be profitable for the LNG facilities, Qatar needed to secure its LNG buyers. Thinking of a good price, Turkey simply turned down the offer, assuring that Russia will always supply the natural gas for its economically associated countries.

Picture & Article by: Ima Kabiri

H.E. Mithat Rende Turkey Ambassador in Doha

Since 19190s it has been seen recently that Turks are learning lessons from the past mistakes. Turkey has experienced from a trade row between Russia and Ukraine many times. It is still unclear how many crises Turkey has to face to understand that its purchase strategy leaks and lacks relevant unforeseen plans for urgent situations.

Time has come to increase the ratio of LNG in Turkey’s natural gas purchase. True, LNG is more expensive than the gas that comes through pipelines. Recently the Turkish media were fully broadcasting news stories about how the government has been looking to buy LNG. It is logical to expect that last-minute buyers are always needed to pay more than purchases made under normal circumstances. Plus, the cost of having more LNG is certainly affordable in view of the fact that it will show Turkey is dependence on Iranian and Russian gas.

Qatar gas as it’s been said will not be available until 2010. Turkey, however, has started to negotiate to buy gas for later on. Actually, the real problem lies under the fact that whichever of the energy ministry’s strategy just relies on the diversification of the natural gas supplies through the realization of more pipeline projects. But there is no sign yet that shows Nabucco project targeting to bring gas from Central Asia to Europe through Turkey. On the other hand, the last crisis has shown that the purchase of Azerbaijan gas is not enough to alleviate for hundred years.

Construction as important as Gas

There was a little faith that a high-level visit to Qatar in Feb. 2008 might serve for an exercise in opening the doors. And at least it could provide a good chance to devise a more meaningful energy strategy for the future. This small country in the Gulf had held the world’s third largest proven natural gas reserves. It is also the world’s biggest exporter of LNG.

The visit of President Abdullah Gul to Qatar in the first week of Feb. 2008 was very successful as Turkey managed to draw the attention of the Turkish media and journalists this time to Doha. Now Turkish people know more about Qatar and Qatar’s market. In the field of energy Turkey has a great potential to engage in meaningful cooperation.

Essential to say also, the visit’s importance is never-ending to the energy issues. With the price scramble in the energy resources, Qatar has huge revenues and it plans $130 billion worth of infrastructure for the next five years.

Doha has been named the “city of cranes” for the existing of construction projects. Many of these cranes belong to the Turkish construction companies. The amount of projects the Turkish companies have undertaken exceeded $5 billion, which ranks Qatar second after Russia, in terms of the enormity of projects undertaken by Turkish companies.

Turkey’s Ambassador in Doha, H.E Mithat Rende, sees good prospects for Turkish companies in Qatar and believes the recent visit of President Abdullah Gul was “very successful”.

During the visit of President Gul, Turkish Embassy organized the first Turkish-Qatari Business forum, had opened by the Prime Minister of Qatar and the President of Turkey, where 150 Turkish businessmen and their Qatari counterparts came together and exchanged ideas.

Turkish businessmen as he stresses, are interested in investing in Qatar’s infrastructure market. Amongst the businessmen who were on this trip, there were the chairmen and the chief executives of Turkish companies who are already active in Qatari infrastructure market.

There were also many other businessmen who were interested in entering Qatari market as well. Also senior officials’ reprehensive for leading companies like Baytour, Tekfen, Yuksel, Tubin, Insaat, Gama, TAV, Nurol, MNG, Calik were attending this forum, as well as many new contractors who were interested in entering Qatar’s infrastructure market. Like investors who were interested in building medium size factories in Qatar in paint, cables and furniture industry.

Also Gül did not only try to increase the share of Turkish firms for future projects, he also looked for more investment from Qatar, which is running a $50 billion fund in 32 countries.

An interesting aspect of the presence of the Turkish companies relates to their indirect contribution to the Qatari economy. Rende explains: “Foreign construction firms have been doing business at high costs. Turkish firms provide competitive prices. Hence, foreign companies were forced to take their costs down.”

Rende believes that Turkish companies had gained a huge reputation in Qatar’s infrastructure development sector, for first, they are world class companies. Secondly, they have vast experience of over 27 to 30 years abroad and in the region as they have been in Saudi Arabia, Libya, Oman etc. Third, they tend to work with lower profit margins: the profit margin of a Turkish company is much lower than any other European or American company.

Another important reason he sees is that they have their own skilled labor, from masons to architects and engineers. Also, even before 15 days the construction starts, a contractor can usually have all building materials, goods etc … they reach the construction site even by trucks through the roads. Turkey is geographically nearer to the region, I believe that factor will bring the two countries still closer.”

Speaking of the reputation of Turkish companies in Qatar, experts say: “They are known for the quality of their labor management.”

Qatar is at the forefront of infrastructure opportunity creation, and Turkish companies play a big role in Qatar, with trade expected to reach between $1.2 and $1.5 billion last year.

Qatar’s museum alone was a $650 million project and was contracted to Turkish Cukurova Group’s construction company, Baytur. Tepe Akfen TAV was also involved in the second phase of building Qatar’s airport.

Qatar has an enormous financial surplus and is looking for investors in infrastructure projects. That’s where Turkish businesses and corporations can play a big role, as they are very developed in infrastructure

The ambassador says Turkey is keen to build cultural relations with Qatar too. So, it is not only a matter of contractors; the focus is also on building cultural relations.

Stressing out Ankara also would like to organize a Turkish products exhibition, as Turkey produces many products and in fact maybe not many people in Qatar know that Turkey’s total exports last year reached $104 billion.

Evidence that shows how Turkey is keen to establish economical relations with Qatar, is holding various business forums for the Turkish investors. The last business forum for a Turkish Business Delegation was just held before the opening of Projects Qatar 2008.

Talking about the facts and figures, Omur Atligan, ‘Deputy Commercial Counselor for Turkey Embassy in Doha’ says: “I am so fortunate today to witness how Turkish firms presence growing in Qatar. We try to help the Turkish investors who really offer incredible proposals to Qatar industry market.” Almost 50 Turkish companies in construction and building materials, has been participating in Projects Qatar 2008.

The last note on Qatar is the second week of April 2008 when Turkey’s Prime Minister Recep Tayyip Erdogan visited Qatar with a large delegation of corporate representatives to strengthen business relationships, and the two countries are currently negotiating a free trade agreement. Projects contracted to Turkish companies in Qatar have been mushrooming with the construction projects.