Onboard PM’s Special Aircraft: Qatar may invest $5 billion in energy and fertilizer projects in India as part of New Delhi’s efforts to use surplus funds from the energy-rich Gulf region to shore up slowing economic pace.
Prime Minister Manmohan Singh, on his way back from the three—day maiden visit to the region, said he discussed with the Qatari leadership the modalities of setting up the $5 billion fund dedicated for investments in India.
“We discussed the modalities of Qatar investing about $5 billion in India. In the next 2 or 3 months, we will work out modalities (and) identify projects in the area of energy, power, fertilizer and related activities,” he said.
The discussions over the next couple of months would enable the Government of Qatar to decide where it wants these funds to be invested in.
Discussions on the Qatar Investment Fund followed India and Oman signing an agreement on 8 November to set up a $100 million joint investment fund for financing projects in telecom, infrastructure, utilities, health and urban infrastructure.
“The India—Oman Joint Investment Fund, with an equal contribution from each side, would eventually go up to $1.5 billion,” the Prime Minister said.
From Qatar, India is keen to source a minimum of 2.5 million tonnes of additional liquefied natural gas (LNG) and buying fertilizers on a long-term contract.
“We also discussed the possibilities (of Qatar) supplying fertilizers (to India through) either investments in fertilizer plants in India or expanding production fertilizer plants in Qatar with assured buyback in India. And it was agreed the two countries will explore possibilities,” he said.
The Prime Minister said Qatar has agreed to consider selling more LNG to India in one or two years.
“On my request and on the request of Petroleum Minister Murli Deora, the Government of Qatar has agreed to consider enhancing our allocation in the course of one or two years,” Singh said.
India currently buys five million tonnes of LNG a year from RasGas of Qatar under a 25 year contract. Next year an additional 2.5 million tonnes of LNG will be available under the same long-term contract.
Deora in his meeting with Qatar Deputy Prime Minister and Energy and Industry Minister Abdullah bin Hamad al Attiyah projected a shortfall of 5-7.5 million tonnes of LNG for industries in India.
Qatar stated that its current LNG production is all tied up and will consider New Delhi’s request when new projects come up in 2011.