How Qatar’s oil boom could be a boon for the world
When Qatar’s state-owned oil company said it was investing $400 million in the US to develop a liquefied natural gas (LNG) terminal in the Gulf state, many people were expecting an oil boom.
But the reality was a bit different.
Dubai, which is also home to some of the world’s largest oil reserves, is one of the biggest losers from the global oil glut, which has been exacerbated by low prices for crude and crude oil.
“The LNG project will be very different from what was originally planned,” says Daniel Zangman, who worked at the World Bank in Dubai as its director of economic and finance development from 2014 to 2017.
“We were told that the project was going to be a major new investment in the UAE and that this was going be a massive expansion of our economic capacity and employment.”
It’s a big change for the UAE, which had been the world leader in LNG exports and was planning to invest about $100 billion in the process, according to the World Resources Institute (WRI), an international research organisation.
But while the project is still years away from completion, it is expected to generate hundreds of millions of dollars in new economic activity in the region.
“It is a really big boost to the economy,” says Mr Zangmen.
“It’s going to create more jobs for people and it’s going a long way to helping to create a diversified economy in the Middle East.”
Dubai is one big beneficiary from the glut of cheap oil in the world, thanks to its relatively inexpensive natural gas.
The world’s second-largest economy is already the world-leading LNG exporter.
But there’s more to the project than that.
“The project is going to enable us to diversify our energy supply and also contribute to a number of other projects,” says Abu Dhabi’s Deputy Economy Minister, Ibrahim bin Hamad Al-Khalifa.
Dubailand, a key producer of liquefaction gas (also known as gasification) for the energy sector, will also be one of Qatar’s main beneficiaries, with a liquified natural gas terminal expected to open in the country’s third city, Phuket.
“I think that it will be really important for Thailand and also for Vietnam,” says Dr Zangmans boss.
“They both depend heavily on our LNG and LNG production.”
The Qatar Investment Company (QIC), which owns the LAGO-DG project, is looking to diversise its economy in other ways too. “
We’re also looking at other projects, like an extension of the pipeline in Myanmar and the export of liquified gas.”
The Qatar Investment Company (QIC), which owns the LAGO-DG project, is looking to diversise its economy in other ways too.
“I think the Qatar Investment Co is looking at a number in energy and other sectors,” says Zangmann.
“There are many opportunities in the energy, pharmaceuticals, telecommunications, and even the construction of some new hospitals.”
Qatar has been working on a liquepark in the eastern port city of Ras al-Khaimah for years, and its new LNG terminal will allow it to build on that.
But a key challenge is finding a new source of energy to power the refinery.
“There are no reliable sources of gas to run the refinery,” says QIC’s managing director, Hamad Abu al-Jawwal.
“So we are working on developing the natural gas for the liquefactory.”
“We are going to develop liquefactions for the LGA [liquefied petroleum gas],” says Dr Abdul Rahman al-Omar, QIC chief operating officer.
“This is a very exciting development for us.”
Dublin has a major role to play too.
The city has been a key player in the development of Qatar as a LNG hub, and will likely be one to look at when the LUG is ready.
“Dubai has been very successful in building LNG refineries and has invested a lot of money in the construction and development of these facilities,” says Jérôme Aoun, a senior fellow at the Peterson Institute for International Economics.
“What Dubai can offer us is an energy hub that will allow us to export liquefying gas to Europe and to Asia.””
But Dubai is not the only country benefiting from Qatar’s investment in LAGOs. “
What Dubai can offer us is an energy hub that will allow us to export liquefying gas to Europe and to Asia.”
But Dubai is not the only country benefiting from Qatar’s investment in LAGOs.
In February, the UAE signed an agreement with Saudi Arabia to develop LNG terminals in the Arabian Gulf.
But, as with the LIGOs, it remains to be seen if the deal will actually be implemented.
“A lot is still up in the