Qatar has the third largest proved natural gas reserves in the world which, according to the 2019 BP Statistical Review of World Energy, amounts to 872.1tn cubic feet. Qatar Petroleum, which is fully owned by the Qatari government, is the custodian and developer of Qatar’s oil and gas resources with operations along the full hydrocarbon value chain.
This week, Saad Sherida Al Kaabi, the CEO of Qatar Petroleum and Qatar's Energy Minister, announced Qatar is targeting to produce 126mtpa of LNG by 2027 (~6.7m boe/day) versus its current production run rate of 77m tons/year. In 2017 Qatar Petroleum had announced plans to expand production from this field to 110 mtpa by 2024. Supporting this latest expansion is some positive news on Qatar’s key North Field reserves (the world’s largest non-associated gas field lying offshore from the North-East of Qatar).
Kaabi stated: “I am pleased to announce that our appraisal efforts have borne fruit, and that we have confirmation that the productive layers of the North Field extend well into Qatari land in Ras Laffan. Studies and well tests have also confirmed the ability to produce large quantities of gas from this new sector of the North Field”. Al Kaabi went on to note: “These results will also enable us to immediately commence the necessary engineering work for two additional LNG mega trains with a combined annual capacity of 16 million tons per annum.”
One issue is the increasing amount of supply coming onto the LNG market although Qatar as a low cost producer is well positioned on the cost-curve. Kaabi has commented on this in the past: "The issue is that if the price is so low it will force the higher cost people to shut down. We want to be at the lowest end of that, so no matter what happens in the market, we will always have a market that will give us a margin that we can make money in because of our low costs. So we don't worry about low gas prices."
Qatar’s natural resource endowment and accompanying LNG exports have been important drivers behind the economy’s transformation over the past 20 years and are a key factor behind its accumulation of sizeable asset buffers, a major economic and credit strength. Thus, the hydrocarbon sector is an important consideration of the Qatar National Vision 2030 even though QNV2030 looks for ways to diversify economic growth: “A key element of successful and sustainable economic development is effective, long-term stewardship of Qatar's hydrocarbon resources. This requires finding the right balance between energy exploitation and economic diversification. A vigorous oil and gas sector will continue to play a central role in Qatar's economy, as it contributes greatly to the development of the nation.”