Qatar's fast growing gas sector has overtaken its crude oil industry for the first time since the Gulf Opec producer launched mega LNG projects to tap the world's largest gas field, official figures showed yesterday.
The gas sector's share of the country's gross domestic product (GDP) stood at QR34.8 billion (Dh35.1bn) in the third quarter of 2008 while the oil sector reached QR30.6bn (Dh30.9bn), according to the figures by the state-run Qatar Development Council (QDC), the country's main statistical body.
It was the first time that the gas sector surpassed the oil sector in Qatar and experts attributed this to a rapid rise in the country's LNG export volume and a decline in crude prices in the third quarter of 2008.
The figures showed the gas sector was also the largest contributor to Qatar's GDP growth in the first nine months of 2008, accounting for nearly 49.3 per cent of the overall GDP growth of around 59 per cent during that period.
The report showed the gas sector alone leaped by around 108 per cent in the first three quarters of 2008 over the same period of 2007 while the oil sector soared by around 58 per cent, contributing by 22 per cent of the total growth.
By the end of September, the gas sector became the largest single component of Qatar's economy, accounting for around 33 per cent of the GDP of nearly QR108.3bn (Dh109bn) during the period.
Experts believe the gas sector, mainly the liquefied natural gas (LNG), will remain the dominant component of Qatar's GDP in 2009 as sales are projected to swell by at least 10 million tonnes and crude prices are forecast to average nearly half their 2008 peak average of more than $95 a barrel.
"At that pace of growth in Qatar's LNG exports and given the expected sharp decline in oil prices as well as Qatar's crude output, the LNG sector will surely dominate the economic scene in 2009," said an economist from the Doha-based Gulf Organisation for Industrial Consulting. "I believe LNG exports will also fetch Qatar more hard currency revenue than oil earnings this year."
Qatar launched massive LNG projects in mid-1990s to tap its gigantic offshore North Field and diversify its sources of income away from volatile crude sales.
The North Field, discovered in 1971, is the largest non-associated gas field in the world, with proven reserves currently estimated at over 902 trillion cubic feet, which is equivalent to about 162 billion barrels of oil.
These reserves would translate into 14 per cent of the world total and will be sufficient to support planned production of natural gas for over 200 years.
The North Field extends over an area of nearly 6,000 square kilometres, predominantly underlying the territorial waters of Qatar.
LNG output was estimated at nearly 31 million tonnes at the end of 2008 compared with only five million tonnes in late 1990s. Production is expected to climb above 40 million tonnes by the end of 2009 and peak at 77 million tonnes in 2011 to turn Qatar into the world's largest LNG exporter.
Such projects have allowed Qatar, which controls the world's third largest gas resources after Russia and Iran, to record the highest growth rates in the Arab world over the past seven years and the country could be the top economic performer in the world through 2009.
The rapid rise in its GDP has turned Qatar into one of the 10 wealthiest nations, with its per capita income exceeding $75,000 last year. The government-owned Qatar Petroleum has approved a staggering QR222.7bn for its oil and gas development scheme during 2008-2012. The oil plan will lift production from its onshore and offshore fields from the current 860,000 bpd, to around 1.08 million bpd by the end of 2010.
Around QR104bn will be pumped into refining and gas-to-liquids (GTL) projects while the natural gas sector will receive nearly QR63bn.
Allocations included QR25bn for industries, QR19.7bn for crude oil and around QR11bn for petrochemicals.
According to the Saudi American Bank group, the global crisis could put downward pressure on Qatar's growth but the economy would still record the highest growth rate in the world this year. "While the global economic outlook is increasingly challenging, Qatar's fundamentals are strong. Large external surpluses, favourable demographics and growing LNG production will help maintain rapid economic growth.
"While not immune to the crisis in the global financial markets, looming world recession, and falling oil and gas prices, Qatar is very well placed to weather the storm and is projected to continue growing at around 10 percent in real terms in 2009. On the basis of most available growth projections this would make it the fastest growing economy in the world next year."