A year of financial crises in the world, topped by weak oil prices, looked set to seal predictions of a year of austerity and gloom for the counties of the Arabian Gulf. Qatar set its 1999-2000 budget based on oil prices of $10 per barrel, the profits of companies like Qatar Fertiliser Co (QAFCO) fell despite an increase in sales, and expatriates began to question their job security amidst cuts in technical allowances for a number of government employees as part of a certain degree of retrenchment.
However, with officials still expressing overwhelming optimism about the state's long-term economic future, the country knuckled down to riding out the turbulence, looking to the second half of the year and the scheduled completion of a number of ambitious projects at the turn of the century for inspiration. Qatar National Bank's June Economic Review of Qatar predicts a 3.5 per cent growth in GDP in 1999, and estimates that the country's per capita income will rise to US$31,122 in the period 1999-2002, as the production of Liquefied Natural Gas (LNG) rises from 3.9 million tonnes in 1998 to an expected 18.3 million tonnes in 2002.
Qatar's second grassroots LNG manufacturer, Ras Laffan Liquefied Natural Gas Company, is on the brink of exporting its first LNG cargo to Korea on 23 August in a 25-year take-or-pay deal with Kogas that guarantees the company's viability and success. It is still in discussion with a number of other countries in its efforts to diversify its markets and will be looking both to long-term contracts and spot sales. With its onshore and offshore facilities completed ahead of schedule, RasGas brought the first gas ashore from the massive North Field in April to commission the plant, and began LNG production on 23 May. Its first export shipment of condensates went to the UAE at the end of May, when it loaded 250,000 barrels aboard the tanker Wabasha in a joint shipment with Qatargas (the country's first LNG producer) which also sent a quarter of a million barrels of condensate to the Emirates National Oil Company.
There's been relative silence on the opportunities for Qatari LNG sales to the sub-continent since a signing ceremony between RasGas and Petronet of India failed to materialise during the Indian leg of the Emir's seven-nation Asian tour in April, but a number of discussions on the supply of piped gas look promising. Minister of Energy Industry, Electricity and Water Abdullah Bin Hamad Al-Attiyah, is reported to have had positive discussions on that front with both Lebanon and Pakistan, and under a statement of principle with the UAE, proposals are being put forward for a seven-year project to build a gas pipeline to Abu Dhabi and on to Oman to supply gas to those countries through an emergent GCC grid that could ultimately also extend north to Saudi Arabia and Kuwait.
Gas utilisation in the GCC countries is already high by world standards, and they say it is set to rise by a further eight to 10 per cent per year between now and 2010.
Property developers have meanwhile discovered there has never been a better time to build in Qatar, and the country is expected to sink around a billion riyals into developing tourism. Marriott have recently signed a 10-year deal with Qatar National Hotels...