DOHA: The first production from Qatar’s ambitious Barzan gas project is expected later this year. The project will meet Qatar’s growing domestic gas demand, QNB’s ‘economic commentary’ on Qatar noted yesterday.
According to data, Qatar’s domestic gas consumption grew by 80 percent in the last five years.
Qatar’s domestic gas consumption stood at 24.9 billion cubic metres (bcm) in 2009 which jumped to 44.8bcm in 2014.
The rise is driven by increasing demand for electricity and water as electricity and water desalinisation sectors account for most of the natural gas consumption in Qatar.
QNB’s research note said Qatar’s non-hydrocarbon sector continues to be the main driver of economic growth.
It expanded by 9.1 percent year-on-year in the second quarter of 2015. The largest contributors to real non-hydrocarbon growth were financial services, construction and trade, hotels and restaurants. Construction activity grew by 19.7 percent year-on-year reflecting the ongoing infrastructure projects.
These projects include the new $40bn Doha metro, real estate projects such as Musheireb in the centre of Doha ($5.5bn) and Lusail to the north ($45bn), as well as new roads, highways and further expansion of the new Hamad International Airport.
QNB’s latest ‘economic commentary’ on Qatar yesterday noted growth in the Qatari economy accelerated in the second quarter of 2015.
Real GDP grew by 4.8 percent year-on-year, compared with 4.0 percent in 2014, QNB analysts said citing the latest data released by the Ministry of Development Planning and Statistics (MDPS).
A string of other releases show a continuation of growth and diversification into the third quarter despite substantially lower oil prices.
“This manifests itself in low inflation, strong population growth and large external surpluses. As a result, and with new gas production expected to come online, we expect growth to continue to accelerate to 6.4 percent in each of 2016-17,” the QNB report said in its ‘economic commentary’.
The QNB said rapid population growth , mainly due to the influx of expatriates attracted by the implementation of large-scale projects, is generating demand for services.
As a result, strong growth was recorded in financial services (10 percent in Q2 2015 over a year earlier); trade, restaurants and hotels (12.5 percent) and government services (6.3 percent).
On the other hand, hydrocarbon GDP was broadly unchanged in the second quarter, rising by only 0.9 percent year-on-year due to maturing oil fields and the moratorium on further gas production from the North Field.
With the strong growth of the non-hydrocarbon sector and the stabilisation of hydrocarbon production, the Qatari economy is marching on with its diversification drive.
Consequently, the share of the non-hydrocarbon sector in GDP rose to 61.7 percent in the second quarter from 59.8 percent in the previous quarter.
Beyond the second quarter, the latest indicators of the Qatari economy suggest a continuation of the strong growth and diversification drive into the second half of the year.
The implementation of investment projects is moving ahead. This continues to attract expatriates, resulting in 10.2 percent year-on-year growth in population in August.
Therefore, the strong growth in the non-hydrocarbon sector should continue in the third quarter even though oil prices have fallen by 19.4 percent during the quarter. This suggests that Qatar is capable of weathering lower oil prices thanks to a favourable macroeconomic environment characterised by low inflation, large external surpluses and healthy fiscal balances.
The QNB report, therefore, expects this environment to be conducive to future growth and diversification. The report also forecast real GDP growth will reach 4.7 percent in 2015 on the basis of double-digit growth in the non-hydrocarbon sector. From then on, real GDP growth is projected to rise to 6.4 percent in each of 2016-17 as near-double-digit non-hydrocarbon growth will be supplemented by increased gas production from the Barzan project.
The Peninsula
