Qatar Fights Back By Planning To Boost Gas Production

Arab nations seeking to isolate Qatar were angered Wednesday. There’s one major area where their ostracism campaign is falling short: energy. Instead, Saudi Arabia and its regional allies have joined forces against small but powerful Qatar, which has long irked its neighbors by pursuing a foreign policy that contradicts their interests.

The rating takes into account “a number of credit strengths embedded in Qatar’s credit profile and reflects Moody’s view that the sizable net asset position of the Qatari government and exceptionally high levels of wealth will continue to provide significant support” for the time being, the report stated.

Production facilities will be doubled at Qatar’s section of the North Field, which it shares with Iran, reporters were told at a news conference this morning.

Reports quoting Saad Sherida al-Kaabi, the CEO of Qatar Petroleum, said his company meant to raise production from 77 million tonnes of natural gas to 100 million tonnes a year by 2024.

Kaabi said Qatar wanted the production increase to be carried out through a joint venture with worldwide companies. Flooding the market with more LNG will help defend its place as the world’s top exporter, a position challenged by Australia.

“We are planning to build new LNG trains, and we will look for global partners”, he said.

Qatar Petroleum, through its LNG-producing divisions Qatargas and RasGas and other investments in related businesses, holds stakes in companies that extract, process, ship and receive gas.

With such low production costs and LNG facilities closer to buyers in Europe and Asia, the Qatari move means USA producers could struggle to sell their LNG competitively and projects still needing finance could struggle to find investors.

Qatar supplies 30 percent of the world’s LNG, according to the International Group of Liquefied Natural Gas Importers.

Its biggest gas customers include Japan, South Korea and India.

“We hope wisdom will prevail and Qatar will eventually make the right decisions”, Mr Shukri added.

On Tuesday, Kaabi reiterated that the company does not plan to cut the pipeline that delivers gas to the UAE despite the crisis.

“We would have to figure out why Qatar is planning to boost its output”.

Saudi Arabia, the UAE, Bahrain and Egypt have severed diplomatic and transport ties with Doha in a dispute that has raised concern across the Middle East and beyond. However, domestic shortages of the fuel may limit exports from the Pacific nation. The Qatari regime needs a boost in gas production in the face of sliding oil production, sustained low oil prices and extravagant infrastructure expenditures as it prepares to host the 2022 FIFA World Cup.

Saudi Arabia also sealed its land border with Qatar, geographically isolating the tine Gulf state.

The head of Qatar Petroleum also added that Qatar wants the production increase to be carried out through a joint venture with worldwide firms.