Qatar, renowned for its vast reserves of natural gas and robust hydrocarbon activities, holds approximately 12% of the world’s proven natural gas reserves. The country has long relied on its natural gas and petroleum resources as the main drivers of its economy, exporting significant quantities of natural gas and oil on a daily basis. According to the US-Qatar Business Council, Qatar exports nearly USD 35 billion worth of natural gas (equivalent to approximately 4.3 trillion cubic feet) and over half a billion barrels of oil per day. The primary market for Qatar’s natural gas is Asia, accounting for 70% of its exports. In recent years, Qatar Petroleum (QP) has announced plans to expand the North Field, including the development of four new liquefied natural gas (LNG) trains. Despite some delays caused by the COVID-19 pandemic, QP aims to bring these new trains online by 2025, increasing the total capacity to approximately 110 million metric tons per annum (MMTPA). However, amidst its dominant position in global energy markets, Qatar’s leaders in the public and private sectors are now focusing more on energy and economic diversification.

The ongoing efforts for energy diversification have primarily revolved around expanding downstream products and gas-to-power projects that rely on Qatari natural gas. QP has forged numerous partnerships aimed at enhancing the nation’s petrochemical production, including collaborations with Shell and Qatar Petrochemical Company (Qapco), among others. These initiatives were launched in anticipation of growing competition among global natural gas producers, with the objective of maintaining Qatar’s market share not only in natural gas exports but also in value-added downstream products. The development of downstream products will enable Qatari firms to effectively counter challenges posed by low-cost natural gas producers in countries like the United States, while providing the Qatari economy with an important source of additional growth in an environment characterized by low prices. Moreover, new gas-to-power projects offer opportunities for increased domestic consumption of Qatari natural gas and expanded export activities targeting European markets.

Market operators within Qatar are particularly enthusiastic about the potential of diversification for small and medium-sized enterprises (SMEs). Creating a domestic marketplace that supports local entrepreneurs and businesses has been a focal point for Qatari leaders, and downstream petrochemical production presents numerous exciting opportunities. A key component of this strategy is the Tawteen program, also known as the Supply Chain Localization Program for the Energy Sector in Qatar, led by QP in collaboration with other industry stakeholders. The program aims to attract knowledge-based and technology-driven companies to the local energy sector, establish in-country suppliers that can cater to the needs of the local energy sector, and promote the development and diversification of the Qatari economy. As downstream activities gain prominence in Qatar’s energy landscape, national leaders are committed to ensuring that value creation and capture occur within the country. They recognize that long-term success requires a holistic approach to energy production and value generation.

This shift in focus is also evident in the investment strategy of Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA). Despite the significant role of oil and gas, the QIA has announced its intention to diversify its capital allocation towards assets beyond the hydrocarbon industry. This includes the development of an infrastructure investment portfolio, with 44% of projects focused on zero-emission investments, according to QIA’s CEO, Mansoor bin Ebrahim Al Mahmoud. Qatari investors and builders are excited to witness the increasing role of green and sustainable development in the country. Diaa El-Masry, General Manager at Qatar Green Leaders, praised the government’s leadership in promoting sustainability, noting that it has inspired many organizations to align their activities with the national vision. Green and sustainable building has become a prominent trend in Qatar, with every organization striving to align with the long-term goals set by the government. As Qatar continues its significant strides towards diversifying not only its energy mix but its entire economy, both public and private sector actors will closely monitor the advancements in downstream petrochemical production.