The LNG trade between Qatar and East Asia: Potential impacts of unconventional energy resources on the LNG sector and Qatar's economic development goals

Abstract

The successful emergence of Qatar into the LNG market is one of the most interesting cases in developmental studies, because of its strategy, planning, and implementation to take advantage of a fossil resource: The North Gas Field. Since the 1990s, the natural gas production enabled an exemplary development in Qatar based on the LNG trade to reach remote markets such as the East Asian basin, a region of the largest LNG importers. However, the technological and commercial disruption emerging from new and unconventional gas resources has started changing the market conditions globally, which could affect the well-established energy trade between Qatar and its East Asian customers, hence its economic development prospects. This paper analyses the market changes on power and position from different players in that trade, with relation to Qatar. The analysis on the demand and supply sides indicates how deep the new resources act as market game-changers such as shale gas did in the US in the past decade, shifting the power balance towards a buyer's market approach. The new balance creates new market conditions towards the flexibilization/globalization of the LNG as a commodity and the evolution of the market, forcing Qatar to design and implement necessary adaptations to maintain its position and importance as a reliable LNG supplier in different levels. The strategic considerations of Qatar are crucial to avoid negative impacts, in an increasingly complex and dynamic market, under heightened conditions of competition never seen on the LNG trade, in addition to the unforeseeable changes brought by climate change, trade barriers and global outbreaks. Such changes call for smart, progressive, and adaptive transitionary energy policies and strategies for Qatar and similar exporters.