Drop in gas prices comes with high cost to Qatar

Nahla Abdelmonem

Covid-19-induced damages are especially serious in countries were dependence is primarily on goods whose prices have been negatively affected by the disease outbreak.

Qatar is one of these countries because the minor Arab state’s economy fully depends on the export of natural gas to the international market.

Qatar braces for huge losses in the coming period in the light of the current drop in gas prices.

This is also true after Doha decided to raise its natural gas production.

In November last year, Qatari Energy Minister Saad Sherida al-Kaabi said his country would raise its natural gas production by 64%.

Qatar invested hundreds of millions of dollars to raise its production to 126 million tons by 2027, instead of 77 million tons now.

Price downfall

Natural gas sustained huge losses in Asia in January 2020, the Russian news site, RT, said in a report it in February.

It said the price of natural gas dropped by 50%, compared with the price for last year.

This is a record drop, the site said.

Qatar has deferred plans to increase natural gas production in cooperation with some international partners because of the drop in gas prices, Reuters said.

It said Qatar earmarked around $60 billion for the implementation of the production increase plan.

Losing partnerships

Qatar signed an agreement earlier this year for the export of gas to Ghana. It will not likely honor the terms of the agreement in the light of the drop of natural gas prices.

China has also decided to reduce energy imports, against the background of the Covid-19 virus outbreak, which threatens China’s partnership with Qatar.