Qatar: Game On

Award of $13bn LNG expansion contract shows Qatar is back in the game of investing in its post-blockade future

We are pleased to announce the launch of our sister company, MENA Consultants, in Qatar Financial Centre. To mark the occasion and the end of the blockade, we have published an in-depth report on the historical background to Qatar’s rise, how this relates to tensions with its neighbours and how Qatar’s future looks in the context of the gas expansion and energy transition. The headlines are included below, please get in touch if you are interested in the full 10-page report: info@mena-advisors.com

Headlines

  • Last week’s award of the main $13bn EPC contract to build the first four new LNG facilities was expected, but still confirms that the blockade is in the past and Qatar is firmly back in the game of investing in the future with a massive LNG expansion.
  • Qatar should have the lowest yields and strongest ratings in the Gulf, given its fiscal strength.
  • Sovereign bond supplies could become constrained, although new GRE issuance is likely.
  • Qatar invested in gas when it was unfashionable and reaped the rewards, but developed an independent streak that irritated its neighbours.
  • Although differences persist, another blockade is unlikely because it was ineffectual.
  • North Field production could last for 300 years at current output levels, creating space for expansion.
  • There could be up to 1m barrels of oil equivalent in reserves per national, nearly 50-times the average for the rest of the GCC.
  • The two-phase North Field Expansion will boost LNG output by nearly two-thirds by 2027, and even more could come after that.
  • The energy transition away from coal will support the growth in demand for LNG—gas is relatively “clean”, burning with half the CO2 emissions of coal, and Qatar is working to reduce additional emissions from the production process.

The full report includes the following list of chapters:

  • The credit story
  • Qatar got rich investing in LNG when it was unfashionable
  • Gas wealth provided a shield during the Gulf dispute
  • A massive expansion: half of new LNG by 2027 will come from Qatari projects
  • LNG should benefit as a lower-carbon fuel
  • LNG remains tied to oil for now

Please get in touch if you would like a copy of the full 10-page report: info@mena-advisors.com

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Rory Fyfe