- Cecilia Barria
- BBC News World
6 hours ago
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In January 2020, Qatari Prime Minister Khalid bin Khalifa bin Abdul Aziz Al Thani took office
With a population of less than 3 million, Qatar has become a crucial country for Europe desperate to replace Russian energy imports.
Along with Australia, this small Middle Eastern country is the world’s largest exporter of liquefied natural gas (LNG) and a potential trading partner for European Union countries, which so far import around 40% of the LNG from the Russian market.
This energy dependency between Europe and Russia was not a big issue until February, when the Kremlin decided to invade Ukraine, making trade relations increasingly unsustainable.
Europe has already started signing longterm deals to increase gas imports from other countries, but this was not enough to offset the loss of Russian gas imports.
In Germany, for example, 55% of the gas consumed comes from Russia. The country’s economy minister, Robert Habeck, recently said unprecedented measures were needed to reduce dependency and counter what he sees as “Kremlin energy blackmail”.
It is not enough that Germany receives ships with liquefied natural gas (LNG) from other latitudes; the plants for processing it have to be built, which according to government calculations could take three to five years.
Despite the logistical difficulties and given the urgency of the circumstances, Habeck said, “We have to try the impractical.” And the country has approved resources for creating floating LNG terminals that will take the product from places as far away as the United States or Qatar can receive gas.
Thus, Qatar comes to the negotiating table in a good position after the start of the war, just as it had already made significant investments to increase gas production and infrastructure.
“There is certainly an opportunity for Qatar,” Karen Young, a senior researcher and director of the economics and energy program at the Middle East Institute think tank in Washington, told BBC Mundo.
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LNG can be exported on ships
expansion plans
Before the start of the war, Qatar had plans to expand export capacity by around 64% by 2027, so the mediumterm possibility of supplying LNG to Europe “will be a boon, both economically, if deals are valued at current prices, and politically. ‘ says Young.
As a semiconstitutional monarchy with the Emir as head of state and the Prime Minister as head of government, Qatar does not have to go through complex decisionmaking processes or receive political support from different parties.
The country’s political system is considered by Western organizations to be an “authoritarian regime,” a description the Qatari government rejects.
Amnesty International has denounced practices it considers “exploitation and abuse” of migrant workers.
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Qatar’s ambitions
When cooled, LNG has the advantage of being easier to transport. It can be loaded onto ships and does not require the construction of large pipelines with longterm investments in the millions.
Qatar’s plan to increase its LNG exports by 64% by 2027 was announced in 2019.
As part of this plan, stateowned Qatargas entered into an agreement to expand exploration of the Campo Norte Reserve, a vast offshore reserve that stretches into Iranian waters and is one of the world’s largest natural gas reserves.
The expansion would allow the country to increase its LNG production capacity from 77 million to 110 million tons by 2025.
Several of Germany’s neighboring countries are in talks with Qatar to secure additional LNG imports.
The urgency to procure new energy sources has intensified in recent weeks after Russia halted supplies to Poland and Bulgaria as part of the war offensive.
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Qatar has one of the largest natural gas reserves in the world.
A rich country keeps getting richer
With more wealth per capita than Switzerland or the United States, Qatar looks set to get even richer.
Demand is also growing in other parts of the world.
Currently almost 80% of Qatar’s LNG exports go to Asia, with South Korea, India, China and Japan being the main buyers.
And by market volume, China has become the world’s largest LNG importer after signing an agreement with Qatar for a period of 15 years.
According to experts, in view of the growing demand from the Asian and European markets, Qatar has all the prerequisites for receiving profitable orders.
Even if not everything brings results immediately, stateowned giant Qatar Energy is in full swing.
Current capacity is tied up under multiyear contracts, which Doha says it won’t cancel in order to divert shipments to Europe.
Still, some companies, like Morgan Stanley, expect that Europe’s decision to import gas from other nations will lead to a 60% increase in global LNG consumption by 2030.
As long as this scenario takes shape, Qatar’s economy will grow by more than 4% this year, according to Citigroup the fastest growth since 2015.
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