From the Arctic to Latin America, Qatar is scanning the globe for multibillion-dollar energy investments in hopes of diversifying its income and vastly expanding its international energy reach.
Qatar’s eagerness to expand abroad is driven by the kingdom’s robust foreign policy, a moratorium on new projects in its single biggest gas field, and a desire to protect itself from fluctuating demand and prices for natural gas.
Having achieved its goal of producing 77 million tons of liquefied natural gas a year, Qatar — the world’s biggest L.N.G exporter — is looking at projects in places like Russia and in industries like electricity, while increasing investments in high-consuming markets in Asia.
Analysts say the Qatari drive to diversify abroad is unlikely to ease because it is expected to stick to its moratorium on new projects in its North Field, the world’s biggest single gas reservoir, which Qatar shares with Iran.
In fact, the kingdom has said it will not lift the ban until at least 2013. Qatar imposed a moratorium in 2005 for fear that rapid production could damage the reservoir. Although Qatar holds the world’s third-largest gas reserves, after those of Russia and Iran, nearly all of them are in the North Field.
“If it doesn’t have the domestic resource to be able to expand its production, it has to look beyond its border,” said Julian Lee, senior energy analyst at the Center for Global Energy Studies in London. “That’s why it is looking to become a much more international player than purely a local one, and that’s what’s behind the interest in potential projects in Russia, Australia and growing investment in China.”
Qatar’s policy of having stakes in various energy sectors and cooperating with rivals echoes its political approach of having good ties with friends and foes.
Qatar has expressed an interest in acquiring a stake in the Russian gas producer Novatek and its Arctic Yamal L.N.G. project, which would be the first Qatari foray into an L.N.G. production facility beyond its borders.
Investment in that project would also turn the two gas rivals into co-investors, at a time when Russia is ramping up its L.N.G. output with an eye on Asia, while Qatar is counting on growth in Asian demand to offset a drop in L.N.G. exports to other markets, notably the United States.
An increase in U.S. production of unconventional gas has thwarted Qatar’s ambitions in the United States, the world’s biggest oil consumer. Qatar had so much faith in the U.S. market that it even invested in an L.N.G. regasification terminal there.
Meanwhile, Qatar is vying with Russia over Europe, whose debt crisis could threaten demand for L.N.G.