International gas investments boost growth and expand Qatar's global influence

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With domestic sources of oil in decline – and, until recently, a moratorium in place on further exploitation of the country’s vast offshore natural gas reserves – Qatar has been boosting its overseas investments, with state oil and gas giant Qatar Petroleum (QP) now involved in projects across the globe. QP has been working in cooperation with other international oil companies and state entities, exploiting new resources and opportunities in countries looking for more external investment to develop their local industries.

This is a highly competitive business, especially as Qatar is not the only Gulf country looking to expand overseas. Saudi Arabia’s Aramco and the Abu Dhabi National Oil Company are also looking to boost international investments to counter domestic constraints, placing an increased importance on QP’s cost effectiveness as it moves forward. However, initial signs suggest this foreign expansion has yielded positive results.

Strong Partners

Continuing a strong relationship developed in the domestic market, QP announced in July 2016 that it would work with ExxonMobil to look at Mozambique’s energy assets. Mozambique is home to some of the largest natural gas discoveries in recent times, located in the Rovuma Basin. A major liquefied natural gas (LNG) project has been mooted for the country, with QP and ExxonMobil as partners.

The two have also been working together in the US, winning approval in November 2016 to build a $10bn LNG plant at Golden Pass in Texas. This will include up to three 5.2m-tonne-per-annum LNG trains at one of the few deepwater ports on the Gulf of Mexico coast. QP and ExxonMobil formed a joint venture, Ocean LNG, to sell the plant’s LNG, recently securing a contract with Brazil’s Centrais Eléctricas de Sergipe to provide the company with gas, starting in 2020.

QP also recently secured a 40% interest in an offshore exploration block south of Cyprus. In March 2017, again working with ExxonMobil, it won the tender for Block 10 – thought to be the most promising of Cyprus’ offshore areas due to its proximity to the neighbouring Egyptian Zohr natural gas field.

New Horizons

The company has also been active in Morocco, working in a consortium with Chevron and the Moroccan National Hydrocarbons and Mines Office (Office National des Hydrocarbures et des Mines, ONHYM) to explore and operate off the southern coast of the country. In January 2017 the Moroccan government extended the two-year licence for this work, which followed a February 2016 agreement between QP and Chevron, under which QP obtained a 30% stake in three deepwater exploration leases. These cover an area of around 29,200 sq km, located 100-200km north-west of Agadir. Chevron retains a 45% share in the operation, with ONHYM holding the remaining 25%.

Most recently, QP made a move into Pakistan. In February 2017 the company announced it was joining a consortium – consisting of ExxonMobil, Total, Mitsubishi and Norway’s Höegh – to develop a major LNG import project in the country, in collaboration with Turkish company Global Energy Infrastructure. The project includes a floating storage and regasification unit, along with a jetty and pipeline, which will feed natural gas to the rapidly expanding Pakistani energy market.

World Leader 

These overseas projects demonstrate QP’s focus on natural gas and LNG, with the company – and country – globally renowned for their expertise in this field. “We will definitely invest much more than we have in the past internationally,” Saad Sherida Al Kaabi, president and CEO of QP, told international media in February 2017. “We want to go external to further develop our strength in LNG. That’s why you see us expanding internationally. We will remain for a very long time the leader in LNG.” Qatar’s goal appears to be achievable, as QP possesses the ability to leverage its large domestic assets to make further international investments, particularly as it cuts costs via mergers within its domestic portfolio. As a result, QP will likely remain a major global player in the years to come.

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The Report: Qatar 2017

Energy chapter from The Report: Qatar 2017

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