RAS LAFFAN INDUSTRIAL CITY, Qatar – Over the past quarter of a century, the small Persian Gulf state, Qatar, has been sending increasing amounts of natural gas to a growing list of customers around the world, accumulating enormous wealth and acquiring a geopolitical importance that it wouldn’t have otherwise.
Now, partly due to the war in Ukraine, Qatar’s influence will become even greater.
While the United States and its European allies want to rob Russia of its oil and gas revenues, the West has looked to Qatar as an alternative fuel source to heat European homes, cook food and generate electricity. And while Qatar won’t be able to ship much additional gas to Europe right away because most of its production is under contract to go elsewhere, it is investing tens of billions of dollars to increase production by about two-thirds by 2027.
About half of that gas could go to Europe, Saad Al-Kaabi, Qatar’s energy minister and head of state oil company QatarEnergy, said in an interview.
“The stars are all aligned to help Qatar become a very important LNG exporter to Europe,” said Cinzia Bianco, a Gulf research associate at the European Council on Foreign Relations, referring to liquefied natural gas, a shippable form of the resource.
Rising interest in Qatar’s gas is a sharp reversal for a country that in recent years had become accustomed to Western leaders bashing fossil fuels for their contribution to climate change.
Now those leaders are looking for gas.
Countries that said, “We don’t need oil and gas companies, and these guys have been demonized, bad guys,” said Mr. Al-Kaabi, are now saying, “Help us, produce more, you’re not producing enough,” and so on.”
That shift was driven by President Vladimir V. Putin of Russia’s decision to invade Ukraine in February. Suddenly, European countries, which received nearly half of their gas imports from Russia last year, were looking for other fuel sources to dismantle Putin’s war machine.
This has given Qatar, which is vying with the United States and Australia for the place of the world’s largest LNG exporter, enormous popularity.
In January, as fears of a Russian invasion mounted, President Biden declared Qatar a “major non-NATO ally” and hosted Sheikh Tamim bin Hamad al-Thani, the emir of Qatar, at the White House, the first head of state. of the Gulf that such a welcome by Mr Biden. Energy issues were high on the agenda.
After the war started, Prime Minister Boris Johnson of Great Britain called Sheikh Tamim to talk about “ensuring sustainable gas supplies” and other matters, and senior European leaders flew to Qatar to talk about energy, including Josep Borrell Fontelles, the top diplomat of the European Union. So did Robert Habeck, Germany’s economy and climate change minister, to agree a gas deal with Qatar.
But Qatar’s ability to alleviate Europe’s gas problems in the short term is limited. About 85 percent of current production is committed to long-term agreements, mainly in Asia, Mr Al-Kaabi said.
“I can’t do anything with these tied up contracts,” he said. “Contract sanctity and our reputation are paramount, so I can’t go to a customer and say, ‘Sorry, I have to help Europeans.'”
But in the coming years, Qatar’s investment in LNG will likely be combined with the energy upheaval caused by the war in Ukraine to tie the small desert state more closely to Europe and gradually win praise from Washington, analysts said.
Years before the war started, Qatar started a project at an estimated cost of $45 billion to build two new gas plants and increase annual production capacity by 64 percent, Mr Al-Kaabi said. That gas will hit the market in 2026 and will most likely be split between buyers in Europe and Asia.
Meanwhile, Qatar has invested in terminals to receive LNG in Belgium, Great Britain and France.
Germany, Europe’s largest economy, had no LNG facilities before the war, but has allocated more than $3 billion to purchase four floating terminals. France and Italy are exploring similar options.
It wasn’t always clear that natural gas from Qatar, a windswept peninsula in the Persian Gulf the size of Delaware, would make it one of the world’s richest countries per capita.
When it discovered natural gas in its territorial waters in the early 1970s, officials were disappointed it wasn’t oil that transformed the economies of nearby Saudi Arabia and Kuwait, said David Roberts, an associate professor of international relations at King’s College London.
“For the first 20 years nobody wanted it because nobody saw a market for it,” said Mr. Roberts.
So they mostly left it in the ground.
Then technological advancements opened up. In the 1990s, Qatar and international partners spent billions of dollars creating an LNG industry.
Previously, natural gas was transported by pipeline, which limited the marketability of natural gas. But when it was cooled to 260 degrees below zero Fahrenheit, the gas liquefied and shrank in volume, meaning large quantities could be transported on ships around the world and converted back to gas at destination.
LNG was seen as an expensive, risky gamble at the time, but the market for the new fuel, which emits less than other fossil fuels, grew, and Qatar took a big hit.
“You just see Qatari dominance in the market rise and fall,” said Mr. Roberts, “and they built the best and cheapest LNG operation out there.”
That allowed money to pour into the Qatari economy, giving its 2.5 million people, of whom just 300,000 are citizens, one of the highest per capita incomes in the world.
The capital, Doha, has flourished and sprouted crops of steel and glass skyscrapers and an array of luxury hotels and shopping malls.
The country’s sovereign wealth fund grew, taking stakes in major corporations and significant properties in London, New York, and other global cities.
This year, Qatar will host the World Cup, which will allow it to show itself to an expected 1.5 million football fans from around the world.
Qatar has used its wealth to play an outrageous role in regional politics. It funds Al Jazeera, the Arab satellite network, which has criticized Qatar’s rivals and cheered protest movements and rebel groups across the region during the 2011 Arab Spring uprisings.
It maintains diplomatic relations with groups and countries that hate each other, allowing it to act as a mediator.
In addition to numerous Western energy companies, Qatar is home to the largest US military base in the Middle East, but also has close ties to Iran, with whom it shares its offshore gas field.
War between Russia and Ukraine: important developments
Getting closer to NATO. The Finnish government announced that the nation would apply for NATO membership hours before the Swedish ruling party said it also supported joining the alliance. If accepted into NATO, both countries would set aside a long history of military non-alignment.
Last week, Sheikh Tamim met with Iranian officials in Tehran to continue negotiations on reviving the international agreement on Iran’s nuclear program, a priority for the Biden administration.
Qatar is home to top officials from Hamas, the Palestinian militant group and the Taliban. Last year, the Biden administration received credit for its assistance in the US withdrawal from Afghanistan by welcoming Americans and US partners who left Afghanistan.
“The Qataris have become far more influential than anyone could have ever imagined,” said Jim Krane, who studies energy politics at Rice University’s Baker Institute for Public Policy. “They’ve turned natural gas into all kinds of soft power.”
How Qatar will exert its influence in the future is an open question, but right now it is basking in the international attention its gas deserves.
During a visit to the industrial city of Ras Laffan in the northeast of the country, QatarEnergy officials proudly pointed to the two plants that had processed gas for sale since the 1990s and outlined future expansion plans. On vast expanses of empty sand, two new factories would be built, they said, and a petrochemical plant.
Six huge gas tankers were moored in the harbor to load LNG. Many more ships waited their turn at sea, said Mohammed Al-Mohannadi, a cargo administration supervisor at the port.
“All the magic happens here,” he said.
Mr Al-Kaabi was also clearly pleased that gas is back in fashion.
Years before the war in Ukraine, he said, he was in talks with major German companies about building terminals to receive LNG in Germany, but the German government had not given the necessary approvals.
After the war broke out, the German energy minister flew into Doha with the companies’ directors and said the government would continue the projects.
“The government has now changed 180 degrees,” said Mr Al-Kaabi.
When Germany was ready to approve the projects, he recalled telling the minister: “we are ready to tango”.