QFC newbie to become global portfolio manager of spot LNG

By Shilpa Annie Joseph, Official Reporter
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A Qatar Financial Centre (QFC) newcomer will establish itself as a global portfolio manager of spot liquefied natural gas (LNG) trades with immediate but indirect local impact, after Doha expands its LNG output from the current 110 million tons per annum.

The QFC said in an article that this outcome is one of the “unsung” economic benefits of the North Field Expansion (NFE), which is also expected to boost the asset management industry’s prospects in the region.

The NFE project will pull up not only natural gas from underground but also other important hydrocarbons for export and domestic use, according to the financial center. Associated hydrocarbons destined for export include 260,000 barrels per day of condensate and 11,000 tons per day of liquefied petroleum gas, worth approximately $3.05 billion annually (based on 2020 average prices).

“The additional income earned through hydrocarbon exports will increasingly make Qatar a destination for asset managers and other financial institutions,” the QFC stated. Qatar’s trade surplus is expected to grow in the coming years, as imports of construction materials and machinery decline as most infrastructure projects near completion.

“Once NFE-related exports commence in late 2025, export earnings are destined to reach still higher. Whereas much of the immediate proceeds are destined to the Ministry of Finance and Qatar Investment Authority, there is a progressively stronger case for specialized asset managers to locate in Doha close to their future investors,” QFC noted.

Financial institutions in Qatar will be increasingly called upon to provide a range of sophisticated products to Qatari firms with a rising international footprint, according to the report.

“The QP has made this NFE investment at an opportune time, which will allow it to capture more global LNG market share and gain footholds in new markets as many competitors pull back from major projects”, according to the QFC.

Another major benefit is the North field’s expansion will increase local manufacturing opportunities. Besides, there will be 4,000t/y of ethane for use as feedstock in Qatar’s growing petrochemicals sector. This rise equates to approximately half of the current export potential for 2020, or 36.4 percent of current domestic base quantities.

“As Qatar continues its drive to diversify economically, local manufacturing will play a key role,” the QFC added.

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