Qatar’s LNG income triples in five years

A surge in production nearly tripled Qatar’s income from liquefied natural gas (LNG) exports in five years and the earnings are set to swell further after the completion of massive expansion projects, according to a Qatari bank.

From around QR19.8 billion (Dh20 billion) in 2004, the Gulf country’s revenue from LNG sales rocketed by nearly 197 per cent to QR58.8 billion (Dh59.5 billion) in 2006, Qatar National Bank (QNB) said in a study.

The income was earned from exports of about 30.4 million tonnes of LNG in 2008, nearly 28 per cent of the country’s total exports, QNB said.

“Besides higher income and production, there was a large increase in the number of countries importing Qatari gas during that period,” it said.

A breakdown showed South Korean was the top buyer of Qatari LNG in 2008, importing around 8.5 million tonnes.

India was second, with around 7.5 million tonnes, followed by Japan with imports of 6.9 million tonnes.

Other key importers were Spain with 3.5 million tonnes and Belgium with 2.2 million tonnes.

QNB gave no figures for 2009 but said there was sharp rise in Qatar’s LNG export earnings because of higher output, which topped 44 million tonnes.

It expected further growth this year as output continues to climb.

According to the Saudi American Bank Group (SAMBA), Qatar’s total oil and gas exports were valued at nearly $44 billion in 2009.

Official data showed LNG contribution to Qatar’s gross domestic product overtook the oil sector for the first time last year following a surge in gas production and a sharp fall in oil prices and the country’s crude output.

Qatar launched mega LNG projects in early 1990s to tap its giant offshore North Field, the world’s largest reservoir of non-associated gas, formally estimated at more than 900 trillion cubic feet at the end of 2009.

The country is targeting LNG production of around 77 million tonnes by the end of 2011 but it has not ruled out more projects in the future, depending on demand.

The steady and rapid rise in LNG sales turned Qatar into one of the wealthiest nations in terms of GDP per capita income and allowed it to record large fiscal and current account surpluses.

The country’s economy has also recorded one of the highest growth rates in the world over the past few years.

SAMBA forecast that Qatar would bask in another budget surplus in the current fiscal year because of the increase in its LNG output and higher oil prices, which it projected at an average $70 a barrel this year compared with $60 in 2009.

It showed Qatar’s LNG output surpassed crude oil production in the second half of 2009 for the first time since it launched the gas projects.

SAMBA expected the fiscal surplus at around QR9.2 billion in the 2009-2010 budget and QR9.4 billion in the next fiscal year, which starts on April 1.

“The transfer of large investment income earned by public enterprises in 2008 should substantially boost fiscal revenues in the 2009/2010 fiscal year. In addition, oil prices are now expected to average around $70 for 2009/2010,

considerably higher than the $45 assumption used in the budget,” it said.

“This should contain the decline in government hydrocarbon revenues during the year, and we now expect the fiscal surplus will hold at close to 11 per cent of GDP, despite a strong increase in spending.”

Turning to the next fiscal year, the report projected another expansionary budget, which it said would target promotion and completion of major infrastructure projects, and would be based on a conservative oil price assumption of $50-55.

“As in previous years, both revenue and expenditures are likely to exceed those budgeted, and we project another budget surplus of around eight per cent of GDP, with increasing hydrocarbon revenues being offset by a temporary dip in investment income from public enterprises, and another boost in spending.”

Qatar’s natural gas reserves, concentrated in the offshore 6,000-square-km North Field, are the world’s third largest after those of Russia and Iran.

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