Natural gas is a tricky thing – besides its propensity to blow up, it also requires a change in state (from gas to liquid) for trans-oceanic transport. The capital outlay for liquefaction and gasification terminals is significant as well as time consuming. Over 25 years ago, when the natural gas market was tight, one country invested so extensively in the infrastructure to extract, convert, and ship natural gas that it is now the leading exporter of liquefied natural gas. That country is Qatar.
Qatar not only leads the world in exporting liquefied natural gas (LNG), but is also the foremost expert in the liquefaction process. While energy companies around the world are struggling financially during this period of prolonged low energy prices, Qatar sees opportunity. The country is quietly leveraging its expertise and its capital to buy up natural gas assets around the world.
Back in 2013, when fuel prices were still high, Qatar and Centrica (L:CNA), a British company, purchased natural gas assets in Alberta from Suncor Energy Inc (N:SU) valued at $1 billion. The following year, the Qatar-Centrica team bought additional assets in Canada – this time from Shell (L:RDSa). Meanwhile, Qatar has been sitting on an investment right in the heart of America’s energy industry. Qatar Petroleum, along with Conoco Phillips and Exxon Mobil (N:XOM) own the Golden Pass re-gasification plant on the Gulf Coast in Texas. The plant was originally intended to process imported natural gas, but has applied for a permit to retool as an export facility. Qatar recently expanded its assets by closing a deal to purchase a 30% share in Morocco’s offshore oil and gas assets from Chevron (N:CVX).
Despite a year of lower revenue from oil, the fact remains that Qatar, like its Persian Gulf neighbor Saudi Arabia, has the funds to make strategic asset purchases. The county has low public debt, a large stock of foreign reserves, and an ever more extensive sovereign wealth fund. At a time when major oil companies like Chevron Corporation (N:CVX), ConocoPhillips (N:COP), Royal Dutch Shell A (N:RDSa), and Exxon Mobil Corporation (N:XOM) are struggling to choose between maintaining their dividends or their credit ratings, Qatar is in an excellent position to take assets off of their hands.