GUELLEH REQUESTS QATARI INVESTMENT OF NATURAL GAS

C O N F I D E N T I A L DJIBOUTI 000196

SIPDIS

SENSITIVE

STATE FOR AF, AF/E; LONDON, PARIS FOR AFRICA WATCHER

E.O. 12958: DECL: 02/27/2015
TAGS: PREL ECON EPET ENRG DJ QA
SUBJECT: GUELLEH REQUESTS QATARI INVESTMENT OF NATURAL GAS
AT DORALEH PORT

REF: DJIBOUTI

Classified By: Ambassador Marguerita D. Ragsdale.
For Reasons 1.4 (b) and (d).


1. (C) Summary: Acting Foreign Minister Mahamoud Ali Youssouf
briefed Ambassador on the highlights of President Ismail Omar
Guelleh's Qatar trip in a February 23 meeting she requested
to discuss several issues (see septels). Youssouf said
Guelleh's visit was in response to an invitation extended by
the Emir of Qatar, Hamad Ben Khalifa Al-Thani, during the
latter's last visit to Djibouti in 2003. He said Guelleh
requested Qatari investment in a natural gas terminal at the
new Doraleh Port project. Djibouti would hope to store the
natural gas, export it to neighboring countries, as well as
purchase for local energy needs. He said President Guelleh's
agenda also included a visit to the Al-Jazeera television
station to seek cooperation in training Djiboutian
journalists and technicians. End Summary.


2. (C) Youssouf said the idea of approaching the Qatari's to
invest in Doraleh was based on conjecture that Qatar will be
searching for markets to exploit its large natural gas
reserves. Guelleh suggested during the visit that Qatar
consider African markets and proposed Djibouti as a potential
gateway.


3. (C) Youssouf said Djibouti is pursuing natural gas
because, along with many other African nations, it is focused
on finding alternative energy sources to petrol based
energies. An added concern for Djibouti is the imminent
threat of water shortage. Most of the solutions for this
problem involve desalination, which requires a significant
amount of energy. Youssouf said after the initial investment
of approximately 400 million USD to construct the storage
facility, natural gas will be a cheaper method of energy
production. He also stated that this terminal could easily be
profitable for both Djibouti and Qatar upon export, citing
electricity interconnections with Ethiopia and Yemen as
creating possible consumers of exported natural gas. Youssouf
also cited NEPAD's framework, which focuses on finding energy
solutions, as proof of potential markets. Youssouf said the
Emir was very interested in the prospect.


4. (U) According to an article printed February 17 in the
government-run newspaper, La Nation, the visit also included
discussions on opening Qatari markets to Djiboutian products
such as salt and livestock, encouraging Qatari businessmen to
invest in tourism and the private sector, and establishing
closer bilateral ties. The article also indicated that Qatar
had agreed to send experts to Djibouti to study the
possibilities of the proposed natural gas terminal.


5. (C) Comment: With Emirate Dubai already invested in
Djibouti's port at Doraleh, and President Guelleh needing
further essential development for his impoverished,
strategically-placed nation, Qatar is a sound choice for
dialogue. High on Djibouti's agenda is a new international
airport and potential Qatari investment in such a project
would go far in moving Guelleh toward his dream of making
Djibouti the next Dubai. End comment.
RAGSDALE