Today, Qatar is the largest exporter of LNG in the world and has built an integrated LNG model covering all steps of the value chain from extraction to shipment. Qatar is one of the world’s richest nations, in per capita terms, due to its vast gas reserves. 
Also, it has the largest LNG trains and the largest number of LNG delivery vessels, allowing it to become a very reliable supplier to global markets. Qatar has maintained a clever strategy to diversify its sales of LNG into all major markets, adjusting the mix of destinations and contract types as per market conditions. 
To the east, China, Japan, South Korea and India form major markets and the UK, Poland and other European countries receive Qatari LNG to the west. Crucially, Qatar is not only a large LNG producer but it also a very profitable, with one of the lowest costs of production at $1.6 to 2 a million British Thermal Units. 
The revenues from hydrocarbon development has driven spectacular economic, human and social development as Qatar transforms into a regional economic player. Qatar has huge remaining oil and gas reserves, with a monetary value estimated around $10tn to 17tn. The decision announced in April to increase output of the North Field and raise production from 77mn tonnes per annum (Mta) of natural gas to 100 Mta by 2024 is a move that will boost Qatar’s flourishing economy that plays to the country’s competitive advantage.
LNG is a long-term business and the long-term outlook is that demand will rise as LNG plays an increasingly important role in meeting the global energy needs. 
According to Shell, demand for LNG is predicted to grow 4% to 5% a year between 2015 and 2030, with strong demand coming especially from Asia. Over 34 countries currently import LNG and demand growth increased in 2016 at its fastest rate in the past five years, driven mainly by China and also Africa. 
Supply has risen too from Australia and the US last year but from Qatar’s point of view, increased global supply is a good thing as it grows the global LNG market from which Qatar can capitalise through its competitive advantages of very low production costs and efficient delivery systems. 
Qatar did exactly this in 2016 and maintained its position as the world’s largest LNG producer with over 30% of global supply. A substantial proportion of Qatari LNG production is committed as a part of supply purchase arrangements until 2021 which provides some protection against these new suppliers. 
By also capturing part of the new demand growth, coupled with the recent decision to boost production, will secure Qatar’s global number 1 supplier spot. The increase in production will contribute to stimulating the domestic economy as well as the country’s overall development in line with the Qatar National Vision 2030 under the wise leadership of His Highness the Emir Sheikh Tamim bin Hamad al-Thani. Qatar’s rise as a global LNG player has been rapid, and this decision will ensure Qatar’s spectacular economic success story will continue for years to come through positive long-term growth and development.


Dr Abdulaziz A al-Ghorairi is senior vice-president, group chief economist and head of asset management at Commercial Bank.

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