A recent article in the Financial Times indicates that despite the fall in energy prices, Qatar still presses on with a $15 billion Liquefied Natural Gas (LNG) facility. This comes at a time when energy projects around the world are put on hold because of the global economic downturn. However, Qatar's plan to move forward with the project can prove strategically advantageous.
While the demand for LNG has declined as a result of the global economic downturn, it will certainly return at some point in the future, and as many successful business leaders know, failing to anticipate, and plan for, the increase in demand can put a company (or a country) at a competitive disadvantage. Qatar can utilize the downturn to grab the best expertise in the market at bargain prices to prepare for the return of demand.
Furthermore, because of international politics, the demand for LNG may actually return sooner than the overall demand for energy. For the past two decades Europe has been at the Russia's mercy when it comes to natural gas imports, and Russia wasted no time flexing that muscle. While LNG cannot replace the piped-in natural gas, any political turmoil can push the prices upwards, putting Qatar in a position to reap handsome profits.
Finally, the concern about carbon emissions will be a factor in increasing the demand for cleaner-burning natural gas. All of the above factors indicate that unlike investment in skyscraper that remain vacant, Qatar's investment in LNG production can lead to organic growth in the Qatari economy
No comments:
Post a Comment