Gas expansion may return Doha’s double-digit surpluses

Significance

Although it has not yet hit the production numbers, Qatar Petroleum (QP) is making good progress on its project to expand liquefied natural gas (LNG) output by 40% over the next several years, despite relatively weak prices. This is intended to offset a contraction in the construction sector that is dragging down GDP growth.

Impacts

• The scheduled surge in Qatari LNG supply may deter investment in costlier projects elsewhere.
• Rising fiscal surpluses will further increase Qatar’s scope for investing overseas.
• The new gas further reduces the economic pressure on Qatar to cave to the demands of its boycotting neighbours.