By John Defterios
While the football world and all its fans were rightly focussed on Qatar 2022 — a story kept on the boil by FIFA President Sepp Blatter — the tiny Gulf state announced a big milestone for the natural resource that made it famous, natural gas.
77 million metric tons may not trigger alarm bells of excitement in the general public, but it certainly does within energy circles. Qatar is two years ahead of schedule in hitting this target for liquefied natural gas and is the largest exporter of LNG ahead of Southeast Asian stalwarts Malaysia and Indonesia. It has a fleet of 54 super tankers hauling its products East and West.
Qatar’s veteran energy minister Abdullah bin Hamad Al-Attiyah said that the fleet provides him with the ability to stay on top of a rapidly changing customer base, “We can today because of our flexibility of products and transportation reach any new customer even the next day.”
Qatar has been a game-changer in the market for this product and made a huge bet on the new technology to compress natural gas into liquid form when the Emir His Highness Sheikh Hamad Bin Khalifa Al-Thani took the reigns of power.
The milestone marked at the Qatari industrial city of Ras Laffan — in the company of chief executives from Exxon Mobil, Royal Dutch Shell and ConocoPhillips — comes during the same week that the Qatar Foundation announced the biggest sponsorship package in football history, signing on with Barcelona for a five year, $225 million deal.
It was the Emir’s roll of the dice on LNG technology, helped along (in both technology and capital) by the energy majors in Qatar, which allows for such high profile investments.
How have times changed. The country was nearly bankrupt in the early 1990’s when oil prices plummeted and Qatar was not a big enough player in the crude market to carry sway. It still ranks near the bottom, just above Ecuador in terms of OPEC rankings, but is third in natural gas reserves behind Russia and Iran.
Iran may have problems securing investors for its South Pars field due to economic sanctions, but Qatar continues to produce at a record clip on its side of the same field. Minister Al-Attiyah said that he hopes to expand capacity by as much as 10 million tons in the near future.
To put this into perspective, the Persian Gulf state is producing the gas equivalent of five million barrels a day of crude. That is a handsome sum with a population of just 1.6 million people, 70 percent of them expats.
The minister tries to keep his feet on the ground despite all the fanfare surrounding the milestone. He is expressing concerns for example that oil prices are closer to $90 a barrel rather than $80 and that may dampen demand in 2011.
“I need a very strong consumer. If my consumer becomes weak; I will be come weak too,” says Al Attiyah.
Indeed higher prices may dent demand, but certainly not the new 77 million ton giant.
John Defterios is CNN’s anchor for Marketplace Middle East. Tune in Fridays at 11:15 and Saturdays at 9:15. For more information go to www.cnn.com/mme.