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* Qatar's revenue stream will be significantly enhanced by North Field expansion, whereby Qatari liquefied natural gas production capacity is expected to increase by 64% As a low-cost LNG supplier, Qatar will remain in a “relatively strong competitive position” even after 2030, although demand is likely to peak in the mid-2030s, with increasing use of renewables in the energy market having a gradual impact on demand for hydrocarbons, S&P Global noted in its ratings upgrade. S&P recently raised its long-term sovereign credit rating on Qatar to 'AA' from 'AA-', assigned a stable outlook, and affirmed the country’s 'A-1+' short-term rating. In its overview, S&P noted Qatar's debt interest costs as a share of government revenue have fallen, and therefore it expects them to remain low because the government is repaying maturing debt. Additionally, the government's revenue stream will be significantly enhanced by the North Field expansion, whereby Qatari liquefied natural gas production capacity is expected to increase by 64% (by 2027). “The upgrade reflects structural improvements in the Qatari government's fiscal position. The government's strategy of paying off maturing debt, will sustainably reduce debt-servicing costs to below 5% of general government revenue over 2022-2025,” S&P said. Higher gas production related to the North Field expansion, expected to come onstream from end-2025, should further increase Qatari government revenue. Qatar remains one of the largest exporters of LNG globally. Between 2025 and 2027, the government plans to increase its LNG production capacity by about 64%, from 77mn tonnes per year to 126mn tpy. The strategic pivot away from Russian gas, particularly by European economies, suggests there will be a ready market for the additional Qatari gas. In its forecast, S&P said, “We assume that LNG production levels will be largely flat until 2025, but increase by about 30% over 2026-2027, on the assumption that the full increase in capacity will take some time to be fully utilised." S&P said it expects "strong" non-hydrocarbon sector growth as Qatar hosts the FIFA World Cup from November 20 to December 18, which will support an economic expansion of about 5% in 2022. After the tournament, S&P has forecast real GDP growth will average about 2.5% over 2023-2025 as gas production levels remain broadly stable and non-hydrocarbon sector growth normalises around 4%. The country's strong general government net asset position remains a credit strength and it expects it to increase over the period to 2025, supported by investment returns on Qatar's sovereign wealth fund, Qatar Investment Authority (QIA), assets, and the government's repayment of maturing external debt. Averaging about 150% of GDP in 2022-2025, Qatar Government's large liquid assets provide it with a strong buffer to mitigate the economic effects of external or financial shocks.

Qatar’s inflation will moderate to 2.1% in 2023 from 4.3% this year, researcher Oxford Economics has said in a report. The country’s fiscal balance has been forecast at 9% of GDP this year and 9.3% in 2023 by Oxford Economics. The country’s current account surplus, according to Oxford Economics will be 16.8% of its GDP this year and 14.9% in 2023. Qatar’s real GDP growth has been forecast at 3.6% this year and 3.5% in 2023. GCC central banks hike rates are in line with the US Fed, Oxford Economics said an noted the US Fed hiked its policy rate by 75bps (0.75%) at its latest Federal Open Market Committee (FOMC) meeting. The GCC central banks quickly followed suit – Saudi Arabia, the UAE, Oman, and Bahrain mirrored the rate hike, and their policy rates now stand at 4.5%, 3.9%, 4.5%, and 4.75%, respectively. Qatar has increased their deposit and repo rates by 75bps and lending rate by 50 bps. Higher interest rates will increase borrowing costs, albeit at a slower pace. “GCC countries could see a cumulative increase in interest rates of 425bps in 2022, which will likely weigh on the non-oil GDP of the region. We expect growth in non-oil GDP in the GCC region to be 4.9% in 2022 and then ease to 3.4% in 2023,” Oxford Economics said. In an earlier report, Emirates NBD noted inflation in Qatar has slowed this year but remains high relative to other GCC countries at 4.8% year-on-year (y-o-y) in August. Housing and food inflation has accelerated in recent months but has been offset by lower healthcare and transport costs. Recreation and culture prices have risen sharply however as the sector rebounds from pandemic-era deflation. However, we do expect annual inflation to slow to under 4% by year end, bringing average CPI to 4.5% this year, up from 2.3% in 2021. Money supply growth has accelerated to 12.4% y-o-y in August, the fastest growth since 2018, largely on the back of increased FX deposits. Private sector credit growth has slowed to 6.6% y-o-y in August from a peak of 9.7% y-o-y in February this year. Government and public sector credit growth has declined on an annual basis after double digit growth in 2021, falling to -13.6% y-o-y in August. Qatar’s budget has benefitted from the surge in oil and natural gas prices this year, with oil and gas revenues up 67% y-o-y in H1, 2022. Other revenues have also increased sharply this year, with top line revenue up 58% y-o-y in H1. Expenditure growth has been more restrained at 13% y/y, focused on capital spending projects. Current spending and wages and salaries have increased 11-12% y-o-y in H1, 2022. “We expect the budget surplus to widen to over 10% of GDP this year, rising slightly to 12% of GDP in 2023 on the assumption that oil and gas prices will remain high,” Emirates NBD said.

Beyond the Tarmac As air travel is fast returning to normal, post-pandemic, passengers seem to want improved convenience throughout their trip. They clearly see technology as key to improving the convenience of airport processes. Passengers seek convenience when they plan their travel and when choosing where to depart from. Their preference is to fly from an airport close to home, have all booking options and services available in one single place, pay with their preferred payment method and easily offset their carbon emissions, a recent survey by the International Air Transport Association (IATA) reveals. Obviously, travel during Covid-19 was complex, cumbersome and time consuming due to government-imposed travel requirements worldwide. The devastation that pandemic caused on countless industries was apparent from demand destruction, company closures, revenue and job losses around the world. The aviation industry was one of the hardest hit. During Covid-19, an estimated 95% of the population was told to stay home, and avoid unnecessary trips. That meant almost nobody flew! Passengers want convenience when they plan their travel and when choosing where to depart from. Their preference is to fly from an airport close to home, have all booking options and services available in one single place, pay with their preferred payment method and easily offset their carbon emissions, IATA noted. Proximity to the airport was passengers’ main priority when choosing where to fly from, according to 75% of survey respondents. This was more important than ticket price (39%). Travellers were satisfied being able to pay with their preferred payment method which was available for 82% of travellers. Having access to planning and booking information in one single place was identified as being top priority. 18% of passengers said that they offset their carbon emissions, the main reason given by those that did not was not being aware of the option (36%). “Today’s travellers expect the same online experience as they get from major retailers like Amazon. Airline retailing is driving the response to these needs. It enables airlines to present their full offer to travellers. “And that puts the passenger in control of their travel experience with the ability to choose the travel options that they want with convenient payment options,” said Mohamed Albakri, IATA senior vice-president (Financial Settlement and Distribution Services). In terms of travel facilitation, most travellers are willing to share their immigration information for more convenient processing. Some 37% of travellers said they have been discouraged from travelling to a particular destination because of the immigration requirements. Process complexity was highlighted as the main deterrent by 65% of travellers, 12% cited costs and 8% time. Where visas are required, 66% of travellers want to obtain a visa online prior to travel, 20% prefer to go to the consulate or embassy and 14% at the airport. Some 83% of travellers said they would share their immigration information to speed up the airport arrival process. While this is high, it is slightly down from the 88% recorded in 2021. Nick Careen, IATA’s senior vice president (Operations, Safety and Security) said: “Travellers have told us that barriers to travel remain. Countries with complex visa procedures are losing the economic benefits that these travellers bring. Where countries have removed visa requirements, tourism and travel economies have thrived. “And for countries requiring certain categories of travellers to get visas, taking advantage of traveller willingness to use online processes and share information in advance would be a win-win solution.” With regard to airport processes, the survey noted that passengers are willing to take advantage of technology and re-thought processes to improve the convenience of their airport experience and manage their baggage. Passengers are willing to complete processing elements off-airport. 44% of travellers identified check-in as their top pick for off-airport processing. Immigration procedures were the second most popular “top-pick” at 32%, followed by baggage. And 93% of passengers are interested in a special program for trusted travellers (background checks) to expedite security screening. Passengers are interested in more options for baggage handling. 67% would be interested in home pick-up and delivery and 73% in remote check-in options. 80% of passengers said that would be more likely to check a bag if they could monitor it throughout the journey. And 50% said that they have used or would be interested in using an electronic bag tag. Passengers also see value in biometric identification, the survey reveals. Some 75% of passengers want to use biometric data instead of passports and boarding passes. Over a third have already experienced using biometric identification in their travels, with an 88% satisfaction rate. But data protection remains a concern for about half of travellers. “Passengers clearly see technology as key to improving the convenience of airport processes. They want to arrive at the airport ready-to-fly, get through the airport at both ends of their journey more quickly using biometrics and know where their baggage is at all times. “The technology exists to support this ideal experience. But we need cooperation across the value chain and with governments to make it happen. And we need to continuously reassure passengers that the data needed to support such an experience will be safely kept,” noted Careen.

Total assets of Qatar banking sector increased by 0.4% month-on-month (MoM) by 0.4% this year up to September to reach QR1.835tn, QNB Financial Services (QNBFS) has said in a report. The sector’s total loan book declined by 0.4% MoM (-0.2% in 2022) in September to QR1,213.6bn and deposits went down by 0.8% MoM (-0.9% in 2022) in the same month to QR965.1bn. Loans decrease in September was mainly due to a drop by 2.1% from the public sector. Deposits decline that month was due to a contraction both in non-resident and public sector deposits, QNBFS noted. The public sector mainly caused the credit decline (down 2.1% MoM in September). As deposits moved down by 0.8% in September, the loans to deposits ratio (LDR) rose to 125.8% compared with 125.2% in August. Domestic public sector loans moved lower by 2.1% MoM (-6.5% in 2022) in September. The government segment (represents nearly 31% of public sector loans) fell by 6.8% MoM (-23.7% in 2022), while the semi-government institutions’ segment dropped by 7.6% MoM (+2.2% in 2022). However, the government institutions’ segment (represents nearly 64% of public sector loans) loan book increased by 0.8% MoM (+3.9% in 2022). Total private sector loans moved up by 0.5% MoM (+3.7% in 2022) in September. The services segment and real estate mainly contributed toward the private sector loan growth for September. Services (contributes nearly 29% to private sector loans) increased by 0.7% MoM (+5.4% in 2022). The real estate segment (contributes nearly 21% to private sector loans) went up by 0.7% MoM (+5.7% in 2022). General trade (contributes nearly 21% to private sector loans) gained 0.5% MoM (+1.1% in 2022), while consumption and others (contributes nearly 22% to private sector loans) moved down marginally by 0.01% MoM (+4.5% in 2022) during September. Outside Qatar loans went down by 1.8% MoM (-8.9% in 2022) during September. Public sector deposits declined by 1.3% MoM (+12.5% in 2022) for September, resulting in the overall drop in the Qatar banking sector deposits. Looking at segment details, the government segment (represents nearly 27% of public sector deposits) fell by 15.1% MoM (-13.5% in 2022). However, the government institutions’ segment (represents nearly 58% of public sector deposits) moved up by 5.1% MoM (+23.7% in 2022), while the semi-government institutions’ segment went up by 4.0% MoM (+37.1% in 2022). Private sector deposits increased by 0.5% MoM (+7.9% in 2022), QNBFS said. On the private sector front, companies and institutions’ segment went up by 1.0% MoM (+14.4% in 2022), while the consumer segment rose marginally by 0.01% MoM (+2.4% in 2022). However, non-resident deposits continued its downward spiral and went down by 2.8% MoM (-27.4% in 2022) in September 2022, QNBFS noted. An analyst told Gulf Times that “both the drops relate directly to the government.” “On the Loans side we can see that government overdrafts have come down, which could mean they stopped using short-term funding. On the deposits side again it could be that government is drawing down on its deposits to make payments related to 2022 FIFA World Cup. I think either way the government has a lot of flexibility in funding,” the analyst added.

Commercial Bank has opened a new state-of-the-art branch at Hamad Port. This strategic location plays an instrumental part in the vision of the State of Qatar, and Commercial Bank plays its part in serving the community and businesses that thrive off this development. Commercial Bank Board Members officially opened the new branch at a ceremony attended by key dignitaries, and top executives including Group CEO Joseph Abraham. Commenting on the new branch opening, Abraham said: “Commercial Bank continues to maintain one of the largest branch networks in the country. Our new branch at Hamad Port further reinforces our long-term commitment and expertise in international trade and will support increasing trade between Qatar and the rest of the world, as well as the wider Qatar National Vision”. The new CB branch will provide the customers with a wide range of services. Shahnawaz Rashid, executive general manager and head (Retail Banking), said: “We look to make banking easier for our customers which can mean serving them digitally with speed and reliability or by meeting them in person to assist with complicated transactions and advice. Both we aim to do seamlessly. “The new Hamad Port branch comes as an important step forward in our plan to make banking services widely available for our customers. This new branch will provide both retail and corporate customers with a full range of services to ensure that our benefits reach customers in our society”. Commenting on the new branch opening, Nayef al-Beshri, assistant general manager and head (Branch Network), said: “Commercial Bank has maintained its leadership position through its presence in the most strategic locations across Qatar. The new Hamad Port branch represents a key addition to the Commercial Bank’s expansionary network plan, which is based on targeting the important sectors, of which the transportation sector is one of the most important. “Today, under the umbrella of Mawani Qatar, we aspire to be an effective link between importers, exporters, shipping companies and customs clearance from our customers by providing a full range of services and unique features that meet their banking needs. “This new branch will provide unique banking services to our individual and corporate customers as well as the latest and largest digital banking lobby that will allow our customers to benefit from the 24x7 self-service machines. We look forward to providing more innovative services through a distinctive and modern branch network”. Commercial Bank said it continues to expand its wide branch network to enhance its leading position among the financial institutions in Qatar.

North Field expansion and many other economic diversification projects will drive the national economy beyond 2022, noted Commercial Bank Group CEO Joseph Abraham. The North Field expansion, construction on both the offshore and the onshore components, will provide a boost to the economy, Abraham said in an interview with Gulf Times Monday. He noted Google Cloud has opened its first data centre in the Middle East in Qatar. “I think this shows the diversification of the economy and the continuing international links that Qatar will be expanding,” Abraham noted. He also highlighted Qatar’s emergence as a major international sporting centre. Qatar is hosting the world’s largest sporting event - the 2022 FIFA World Cup from November 20 to December 18. The 2023 Asian Cup football tournament will be held in Qatar. Qatar has also signed a deal to host Formula One from 2023. Asked whether the country’s real estate sector will be able to keep momentum, Abraham noted: “I think definitely. The country’s real estate sector has adjusted over the last few years. On residential, I think we are seeing an upside and many of the policy initiatives that the government has done like residency, will encourage further investments, particularly in the residential (segment). On Commercial Bank’s new branch opening at Hamad Port, the CEO said: “This shows our commitment to support Qatar National Vision 2030 and the country’s trading partners.” He said the Hamad Port branch will have the full capability to provide excellent service to all segments of Commercial Bank customers including retail. “We are grateful for the support we have received from Mwani Qatar and its CEO Captain Abdulla al-Khanji. “At Commercial Bank, our name says it all. We support trade, economic development. Hamad Port is the epitome of Qatar’s global linkages. Record volumes testify this. As Qatar is hosting the FIFA World Cup, we believe this is the opportune time to support Qatar National Vision 2030.” Abraham also said Commercial Bank would continue to open more branches across Qatar. “We are looking to open a branch in Lusail City next year,” he said.

Golden Pass is an export-oriented LNG project in the United States, which is expected to start production by end-2024, HE the Minister of State for Energy Affairs Saad bin Sherida al-Kaabi said Sunday. “Golden Pass will procure gas from the US market, liquefy and send it to the international markets,” HE al-Kaabi said in reply to a question by Gulf Times Sunday. QatarEnergy recently said the construction of Golden Pass, which has a total production capacity in excess of 18mn tonnes of LNG per year, is well underway with first LNG production expected by the end of 2024. The Golden Pass LNG Export Project is located in Sabine Pass, Texas. Affiliates of QatarEnergy and ExxonMobil recently agreed to independently offtake and market their respective proportionate equity shares of LNG produced by the Golden Pass LNG Project. Pursuant to the agreement, QatarEnergy Trading, a wholly owned subsidiary of QatarEnergy, will offtake, transport, and trade 70% of the LNG produced by Golden Pass LNG. As a result of this arrangement, Ocean LNG Limited, a joint venture established in 2016 between affiliates of QatarEnergy and ExxonMobil for offtaking and marketing the entire production of Golden Pass LNG, has ceased operations, and will be wound down.

*ConocoPhillips is third and final international partner in NFS expansion, which comprises two LNG mega trains with combined capacity of 16mn tonnes per year QatarEnergy has selected ConocoPhillips as its third and final international partner in the North Field South (NFS) expansion project, which comprises two LNG mega trains with a combined capacity of 16mn tonnes per year (MTPY). Pursuant to the agreement, ConocoPhillips will have an effective net participating interest of 6.25% in the NFS project, out of a 25% interest available for international partners. QatarEnergy will hold the remaining 75% interest. The partnership agreement was signed at the QatarEnergy headquarters yesterday by HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy, and Ryan Lance, Chairman and CEO of ConocoPhillips. Senior executives from both the companies attended the ceremony. At the signing ceremony al-Kaabi said, “QatarEnergy and its partners continue their efforts to supply an additional volume of about 65mn tonnes of LNG annually, from its North Field Expansion Projects and the Golden Pass LNG Project, to the global market to meet growing demand for cleaner, low-carbon energy, and to enhance energy security of customers around the world.” Al-Kaabi added, “As we have previously emphasised, LNG produced from the North Field Expansion Projects will have the lowest carbon emission levels in the world, thanks to the deployment of a number of technologies, including extensive use of carbon capture and sequestration technologies. This will enable our LNG to play an important role in supporting a pragmatic, equitable and realistic energy transition.” The minister welcomed ConocoPhillips to the NFS project and thanked the working teams at QatarEnergy and ConocoPhillips for their excellent work and cooperation that led to this agreement, and to the Qatargas leadership and project teams for their efforts in implementing the North Field Expansion Projects safely, and on schedule. “I would like to express our sincere gratitude to His Highness the Amir, Sheikh Tamim bin Hamad al-Thani, for his wise leadership and for his unwavering support to Qatar’s energy sector,” al-Kaabi added. The North Field Expansion Projects, comprising NFS and the North Field East (NFE) expansion projects, is the industry’s largest ever LNG project. It will start production in 2026 and will add more than 48mn tpy to the world’s LNG supplies, and raise Qatar’s LNG production capacity to 126 mn tpy. This unique project is characterised by the highest health, safety, and environmental standards, including carbon capture and sequestration, to reduce the project’s overall carbon footprint to the lowest levels possible.

* Country’s budget balance as a percentage of GDP has been forecast by the regional banking group at 10.4 this year and 12 in 2023 Qatar's nominal GDP has been forecast by Emirates NBD at $230.9bn this year and $244.1bn in 2023 while real GDP growth at 5.1% this year and 2.7% in 2023. The country’s budget balance as a percentage of GDP has been forecast by the regional banking group at 10.4 this year and 12 in 2023. Inflation based on CPI has been forecast at 4.5% this year and 2.5% in 2023. Qatar’s GDP grew 4.3% year-on-year (y-o-y) in H1 (first half) of 2022 underpinned by a sharp rebound in building and construction as the country prepares for to host the FIFA World Cup in November and December this year. Building and construction is the largest non-oil sector accounting for 13% of real GDP. The wholesale and retail trade sector posted double digit growth in Q2 (second quarter), while manufacturing output grew 6.2% y-o-y. However, financial and insurance services contracted -5.1% y-o-y in Q2 and -3.7% y-o-y in H1. Smaller sectors such as transport and storage, real estate activities and business services posted strong annual growth, contributing to the 9.7% y-o-y growth in non-oil GDP. Oil and gas GDP was much more modest at 1.2% y-o-y in Q2 but Emirates NBD expects this to accelerate in the second half of the year. The World Cup will likely keep business activity strong in Q4 but the pipeline of new work may continue to soften as borrowing costs rise and fewer new projects are launched. Money supply growth has accelerated to 12.4% y-o-y in August, the fastest growth since 2018, largely on the back of increased FX deposits. Private sector credit growth has slowed to 6.6% y-o-y in August from a peak of 9.7% y-o-y in February this year. Government and public sector credit growth has declined on an annual basis after double digit growth in 2021, falling to -13.6% y-o-y in August. Qatar’s budget has benefitted from the surge in oil and natural gas prices this year, with oil and gas revenues up 67% y-o-y in H1. Other revenues have also increased sharply this year, with top line revenue up 58% y-o-y in H1. Expenditure growth has been more restrained at 13% y-o-y, focused on capital spending projects. Current spending and wages and salaries have increased 11-12% y-o-y in H1. “We expect the budget surplus to widen to over 10% of GDP this year, rising slightly to 12% of GDP in 2023 on the assumption that oil and gas prices will remain high,” Emirates NBD noted.

Beyond the Tarmac While privatisation of SriLankan is high on the agenda of the new government in the island nation, the airline’s CEO says there is a strong future for the country’s national carrier supporting the growth of the Sri Lankan economy in general and tourism in particular. “We are open to the proposal for privatisation from the government,” Richard Nuttall, CEO, SriLankan Airlines told Gulf Times in an interview. Sri Lanka’s President Ranil Wickremesinghe earlier proposed to privatise SriLankan Airlines as part of reforms aimed at solving Sri Lanka’s worst ever financial crisis, which has led to political unrest in the island nation. “There are pros and cons to either form of ownership. We have been in dialogue with our ministry and the government over the different options for privatisation. We are now awaiting a final cabinet decision on the way forward,” Nuttall pointed out. Asked whether privatisation is the way to recover from SriLankan’s losses (the airline reportedly lost about $123mn in the fiscal year 2020-2021, and aggregate losses exceeded $1bn as of March 2021), the CEO said: “As with most airlines, we lost money during Covid-19. As such, the 2020/21 figures do not reflect future expectations. Over the last 12 months or so, the airline has been operationally profitable despite all the challenges in the country. “However, at a full profit and level, we are marginally negative. We have been affected by the fact that interest rates in Sri Lanka are now extremely high, and we are effectively paying interest on the losses of previous years. If we can use the privatisation to help us restructure or pay off some of these past debts, then we are in good shape to deliver a sustainable, profitable and growing airline to support the national economy.” Asked whether there will be any capital infusion as part of SriLankan’s restructuring plan, Nuttall said: “The airline has operated without any funding since early 2021 when we were still deep in the pandemic. We used this time to restructure costs and review our future network. In dollar terms, we have been operationally profitable for the first six months of the current financial year which started in April, and we are still hopeful of breaking even at a full profit and loss level for the year. “The challenges we have are around funding and growth. We still have outstanding debts from Covid times, and we have a number of engines in the shop for overhaul, and aircraft that are due to finish their leases. If we can privatise or find another source of funding, then we have an opportunity to grow. “We believe we should ideally be at least 50% bigger within three years to meet the needs of our current network and to deliver maximum efficiencies. If funding does not become available and we need to keep living of our cash flows as at present, then this future may take a little longer.” On SriLankan’s role in foreign exchange inflow into the island nation, as well as its role in bringing medical supplies for the country's ailing health sector, Nuttall said: “SriLankan generates the majority of its revenue from overseas markets and contributes over $700mn in foreign currency earnings to the Sri Lankan economy every year. The airline has also been a constant facilitator of tourism and foreign trade for the country regardless of the external environs and its challenges. “In fact, SriLankan remains the largest carrier of tourists into the country and collaborates frequently with stakeholders in the local industry to promote destination Sri Lanka globally.” He noted: “We played a key role during the pandemic by flying in critical medicines and vaccinations to the country when other airlines cut back flights. The airline has also spared no effort in supporting the embattled healthcare sector of the country and continues to airlift consignments of donated medicines and medical supplies free of freight charges. To date, we have carried nearly 60,000kg of international medical donations to Sri Lanka.” Nuttall also touched upon his airline’s network and said: “We monitor our network on a weekly basis. Most of the growth that we talked about comes from frequency increases, but we do have three to four new destinations that we believe will work well for us and compliment the network once we have been able to grow the fleet. “In terms of non-performing routes, we do have a couple that are struggling at present. However, we are managing to limit the losses by proactively managing capacity and we believe they will work as tourism returns.” Asked whether SriLankan intended to acquire new aircraft either for fleet replacement or expansion in mind, the CEO said: “We operated with a fleet of 27 aircraft pre-Covid-19 and made the decision to not replace some of the aircraft that left the fleet during the pandemic. More aircraft will exit the fleet next year as leases expire, but we plan to initiate a request for proposal to lease replacement aircraft in the future in support of our operational plans.”

There is a “big competition” between European and Asian markets for liquefied natural gas, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi, said and noted: “Qatar is in discussions with Asian and European markets for LNG supply.” Replying to a question by Gulf Times at a press conference at the QatarEnergy yesterday, al-Kaabi said: “Qatar is not worried about LNG markets. We are in discussions with Asian and European markets for LNG supply… very soon we will announce big contracts, whether it is Asia or Europe”. On “higher LNG prices” prompting major economies like China and India to tap cheaper forms of energy such as coal, al-Kaabi told Gulf Times. “Higher gas prices are caused by many factors. One of these is the Ukraine issue, which has made it a much bigger problem. “If you go back a little bit, it was due to everybody pushing for green and demonising oil and gas companies and there were not enough investments (in the sector). And that caused higher price, which started before the Ukraine issue. The Ukraine issue has just made it a much bigger problem. “You cannot take a short-term view of what’s happening today. Gas prices, which you see in Europe today are due to circumstances there. Majority of the contracts that India and China have, are long-term. Today, they are actually not paying a very high price in comparison to Europe. I think they are getting a very reasonable price. If you analyse the spot price (LNG), you will see it as expensive. “Coal, by the way, is also 300% higher than it used to be. And its utilisation is probably the highest that we have ever seen. Coal has double the pollution of gas.” Al-Kaabi said: “I am not worried about the markets. There are lots of markets available to us. There is a big competition now between Europeans wanting to buy and Asians wanting to buy. And we are in discussions with all…Very soon, we will announce big contracts, whether it is Asia or Europe.” Earlier addressing the event, the minister said the new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes “greater importance” in light of recent geopolitical turmoil and amidst the dire need for cleaner energy to meet global environmental objectives. “These volumes are a welcome addition given the increasing global concern not just over energy security, but also over a pragmatic energy transition as well as fair and equitable access to cleaner energy. “In this context, we must not forget to highlight the advanced environmental characteristics of the NFE and NFS projects, including significant carbon capture and sequestration technologies and capacity, which contribute to our targets of more than 11mn tonnes per year of carbon capture and storage by 2035. “And we will continue to dedicate all efforts to power lives with cleaner energy in every corner of the world for greater economic growth and a better tomorrow for all,” HE al-Kaabi added.    

Shell’s collaboration with Qatar is “very strong”, CEO Ben van Beurden said and noted: “Qatar is a world class leader in liquefied natural gas.” He was speaking at an event at the QatarEnergy headquarters yesterday where QatarEnergy announced its selection of Shell as its second international partner in the North Field South (NFS) expansion project. NFS comprises two LNG mega trains that will have a combined capacity of 16mn tonnes per year (mtpy). It will raise Qatar’s total LNG production capacity to 126 mtpy, by 2027 from 110mn tonnes per year that will be achieved through completion of the North Field East (NFE) project in 2026. Van Beurden said: “It is very important to supply more gas to the world. The world’s transition to a zero-emission energy source will take time. Until such time fossil fuels are required. “As for natural gas, it emits far less carbon and is easy to transport to countries around the world. So, it can provide countries secure supplies of reliable energy.” Commenting on a temporary price cap on natural gas in Europe, the Shell CEO said EU politicians realise the plan is complicated. “I am sure this will settle in an appropriate and responsible way that will really benefit both markets and consumers in Europe,” he told the ceremony; adding; “Europe will have to reduce demand from industry for gas.” HE the Minister of State for Energy Affairs Saad bin Sherida al-Kaabi noted: “Shell brings great capabilities and expertise in this field. We welcome them and look forward to working with them in this project in a manner that enhances our decades-long relationship and fruitful strategic partnerships in Qatar and around the world.” Al-Kaabi also thanked CEO Ben van Beurden “for his distinguished role in advancing our partnership to an unprecedented level and for a relationship that will extend for decades.” Recently, Shell announced that van Beurden has decided to retire at the end of this year. The minister also congratulated Wael Sawan, who was present at the ceremony yesterday, for his selection as the next CEO of Shell from next year. “We wish him all the success,” al-Kaabi said.    

QatarEnergy has selected Shell as its second international partner in the North Field South (NFS) expansion project, which comprises two LNG mega trains that will have a combined capacity of 16mn tonnes per year (MTPY). NFS will raise Qatar’s total LNG production capacity to 126 MTPY, by 2027 from 110mn tonnes per year that will be achieved through completion of the North Field East (NFE) project in 2026. The partnership agreement was signed yesterday by HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy, and Ben van Beurden, CEO of Shell, at a ceremony at QatarEnergy’s headquarters in Doha attended by senior executives from both companies. Pursuant to the agreement, Shell will have an effective net participating interest of 9.375% in the NFS project, out of a 25% interest available for international partners. QatarEnergy will hold the remaining 75% interest. The North Field Expansion Project, comprising NFS and the North Field East (NFE) expansion projects, is the industry’s largest ever LNG project. It will start production in 2026 and will add more than 48MTPY to the world’s LNG supplies by 2027. This unique project is characterised by the “highest” health, safety, and environmental standards, including carbon capture and sequestration, to reduce the project’s overall carbon footprint to the lowest levels possible. QatarEnergy’s deal with Shell is the second announcement for the NFS partnerships. “A third partnership will be announced in due course,” QatarEnergy said yesterday. In his remarks during the ceremony, Minister al-Kaabi reaffirmed Qatar Energy’s determination to continue dedicating efforts to power lives with cleaner energy in every corner of the world for greater growth and a better tomorrow for all. Al-Kaabi said: “The new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes greater importance in light of recent geopolitical turmoil, and amidst the dire need for cleaner energy to meet global environmental objectives. These volumes are a welcome addition given the increasing global concern not just over energy security, but also over a pragmatic energy transition as well as fair and equitable access to cleaner energy.” Al-Kaabi welcomed Shell to the NFS expansion project and thanked the working teams at QatarEnergy and Shell for their excellent cooperation that led to this agreement. He also thanked van Beurden, who is retiring at the end of the year, for his “distinguished role in advancing our partnership to an unprecedented level and for a relationship that will extend for decades.” The minister also congratulated Wael Sawan, who was present at the ceremony, for his appointment as the incoming Shell CEO and wished him all the success. “I would like to thank the Qatargas leadership and project teams for their efforts in implementing the North Field expansion projects on schedule, and with an outstanding safety record. Most importantly, we are forever grateful to His Highness the Amir Sheikh Tamim bin Hamad al-Thani for his wise leadership and unlimited support of Qatar’s energy sector,” al-Kaabi concluded. ends    

Local banks have cautioned customers against fraudsters who offer them prizes, including tickets for sports events in the country. The most frequently used methods by cyber criminals to lure people are email, SMS or WhatsApp messages. Industry sources said congratulatory messages are often sent to customers, offering them free match tickets or mobile phones. To claim prizes, customers are asked to disclose their personal information. Phishing is a way to extract confidential information from account holders in banks or financial institutions using illegal methods. Recently, a resident received a message claiming he has won a latest 5G mobile phone in a draw by a major merchant outlet in the country. He was also asked to send his details to a WhatsApp number provided. Many residents have received such fake messages, it is learnt. Banks have urged customers to check and ensure that email or SMS is from a legitimate source, as scammers tend to use links to collect their data or card payment information. Before making use of the one-time password (OTP), customers must ensure that the details match that of the merchant from whom the product or service has been purchased or sought. Banks have urged customers to be careful with those who pretend to help them if their card gets captured in an ATM. “Any suspicious activity may be reported to the banks immediately,” a source said. Banks have also asked customers not to hand over their card or disclose their PIN to another person under any circumstance. A telecom service provider recently alerted customers not to share their OTP, PIN or card details to anyone, even if they say they represent the company concerned. “We will not ever ask you for any sensitive information of that nature,” the telco noted. The company has also urged targeted customers to contact its fraud control unit if they receive such requests. Industry sources said nationals and residents must be careful about cyber criminals as the country is set to host the world’s most important sporting event – FIFA World Cup 2022 – within a month. “Obviously, there will be heightened business activity associated with any major global event. The country will host thousands of fans and visitors from around the world. Cyber criminals will try to exploit the situation. This happens everywhere in the world,” the source said. “Identity theft is a common form of cybercrime. A cybercriminal will find a way, often through phishing, spam emails, website or even an online pop-up survey to get access to your credit card or banking account information and may use that information to make purchases in your name,” the source added.

Almost half (48%) of banks in the Middle East say the Covid-19 pandemic is the most important driver of their organisations digital transformation strategy, according to Publicis Sapient’s latest Global Banking Benchmark Study. Almost all the Middle Eastern banks surveyed by the digital consulting company believe the increasing demand and level of customers’ use of digital channels during the pandemic will continue over the next 12 months. Banks in the Middle East are also increasingly prioritising offering new services and products to advance their customer experience transformation, once again driven by increasing competition from direct competitors and their innovative products and services. Nearly half of Middle Easter banks declare modern cloud-based systems to be their top priority for operational transformation, with almost all banks surveyed planning to modernise and upgrade their legacy IT systems to help drive their transformational strategy forward. Two thirds of banks in the Middle East cite past failures with digital investments as the biggest barrier to their organisation’s digital transformation efforts; 42% of banks believe their organisation isn’t investing enough in digital innovation efforts to keep pace with the offerings of digital-first challengers. For a third of Middle Eastern banks, growing revenue from new products and services is their main priority when it comes to their digital business transformation. Roughly a sixth of Middle East banks say the ability to fight threat posed by new market entrants (e.g., Google, Apple Amazon) is a top three transformation priority. In addition, the top three drivers behind the need for digital transformation was competition from direct competitors, digital first challengers/fintechs, and consumer tech companies, due to their innovative business models. One in five banks believe they are behind their competitors in their current approach to Digital Business Transformation, Publicis Sapient noted. Banks in the Middle East (42%) are increasingly prioritising being able to offer new services and products to help advance their customer experience transformation. Interestingly, advanced branding and marketing is a top priority for 38% of banks. Not classified as a priority for other major regions, some 28% of banks in the Middle East regard personalised, multichannel, interactive marketing as most critical to a digitally innovative bank. Some 42% of banks in the region are investing in developing new talent as an operational priority as opposed to existing talent (24%). Over a quarter of banks also believe that replacing traditional banking skill sets with new digital skills is the most critical to a digitally innovative bank. Though two thirds of banks feel under pressure to improve their ESG credentials: Nearly seven in ten banks provide ESG employee training, followed by six in ten who provide guidance on ESG risks, Publicis Sapient’s study reveals.    

Qatar could see its hospitality market grow by 89% to over 56,000 hotel keys by 2025, according to research carried out by global property consultancy firm, Knight Frank, with the delivery of the planned hotel room supply forecast to cost approximately $7bn. Knight Frank says tourist arrivals are recovering as the authorities are scaling back Covid-linked travel restrictions, with arrivals from the GCC states already starting to exceed pre-pandemic levels. That said, visitors from India, which has historically been the biggest source of inbound arrivals are still about a third lower than they were in 2019, the report said. Adam Stewart, partner and head of Qatar, Knight Frank, said: “Officially, around 30,000 keys had been delivered by the end of 2021, and we estimate that another 3,800 keys will have been delivered by the time the World Cup commences next month. In addition, Qatar’s hotel capacity will be temporarily boosted by an additional 3,900 cabins in two luxury cruise ships moored off the coast; and a third is being planned. In addition, cabin-style rooms across seven fan villages, designed to house the 1mn fans expected to descend on the State during the World Cup are also being rapidly assembled. “Looking beyond the World Cup, however, reveals some incredible ambitions. The tourism and hospitality sector is expected to contribute 12% of GDP by 2030, making it worth about $55bn, by which time tourist arrivals are forecast to be closing in on 7mn.” Faisal Durrani, partner and head of Middle East Research, Knight Frank, added: “While there is palpable excitement in Doha as the FIFA World Cup draws near, for the country’s hospitality sector the best is yet to come. Indeed, with nearly 27,000 hotel keys expected to be delivered in the next three years, there will be a phenomenal change in Qatar’s hotel offering by the end of 2025. The near doubling in capacity to over 56,000 rooms will be in a post-World Cup environment and comes as the country prepares for an anticipated visitor influx following heightened interest in Qatar once the excitement of the World Cup subsides. “Indeed, with new theme park attractions planned in Lusail such as the new Winter Wonderland and Aquatar on Qetaifan Island, which promises to deliver the world’s tallest waterslide, the seeds of a vibrant tourism and hospitality market are starting to take shape.” Stewart highlighted, “Interestingly, by the end of 2025, international hoteliers will control 62% of Qatar’s hotel keys, up from 59% today. In reality this could be even higher as 17% of rooms are yet to be allocated to an operator.” Turab Saleem, partner and head (Hospitality, Tourism and Leisure) said, “Like other markets in the region, the focus is very much on the higher end of the price spectrum. Just 14% of the expected hotel keys are in the 3 star and lower category; however, this is the segment that could present the greatest opportunity to transform Qatar’s appeal to a wider audience, particularly in the wake of the World Cup which will put the country in the global spotlight”. Knight Frank’s analysis shows that 76% of planned rooms will be classed as either 4- or 5 stars. Today, 69% of Qatar’s hotel rooms fall into this category. “One consideration for operators will be to actively target tourists looking for affordable, or budget-holidays, perhaps through the provision of all-inclusive packages which are already very popular in markets such as Spain, Greece, Turkey and the Caribbean”, Durrani concluded.    

Beyond the Tarmac The global aviation industry has committed to achieving net-zero carbon emissions by 2050. The resolution aligns with the Paris agreement to limit global warming to 1.5C. But fresh investments totalling billions of dollars are required to get there, which the global body of airlines says is an “enormous undertaking”. The new industry target will take a combination of sustainable aviation fuels (SAF), radical airframe designs, cutting edge propulsion methods, efficiency gains, carbon capture technology, and offsetting, IATA says. Certainly, it is an enormous task given that projections suggest 2050 demand will be in excess of 10bn passengers per year. If the industry carried on flying as it is today — a business-as-usual approach — by 2050 it would have emitted approximately 21.2 gigatonnes of CO2. SAF can reduce CO2 emissions 80% or more. They are produced from a number of sources (feedstock) including waste oil and fats, green and municipal waste and non-food crops. They can even be produced synthetically via a process that captures carbon directly from the air. Crucially, SAF feedstock does not compete with food crops or water supplies, nor contribute to forest degradation. By 2025, it is estimated that there will be 11 technical pathways to producing SAF. And by 2050, SAF could contribute about 65% of emissions reduction needed. A massive increase in production will be required though, IATA noted. The largest acceleration is expected in the 2030s as policy support becomes global, SAF becomes competitive with fossil kerosene, and credible offsets become scarcer. The industry plan for net-zero carbon emissions foresees a rapid decline in the use of offsets as in-sector solutions take over. But offsetting mechanisms, including carbon capture technologies, will be vital in the next decade or so and continue to be integral to achieving the overall industry target. The Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) is the main pillar. CORSIA aims to stabilise aviation’s net CO2 emissions at 2019 levels from 2021 onwards and will be implemented in phases. Until 2026, only flights between countries that volunteer to participate in CORSIA will be subject to offsetting requirements. From 2027, virtually all international flights will be subject to mandatory offsetting requirements, covering more than 90% of all international aviation activity. Exceptions include developing countries and small island states. The criteria for offsetting measures are being closely scrutinised. Forestry and natural climate solutions are already available. Some 15-20% of the world’s greenhouse gas emissions come from deforestation but there are challenges in reversing this trend. Reforestation and protection must be permanent, and the needs of indigenous communities must be considered, for example. Offsetting measures on the horizon include direct air capture (DAC), which removes CO2 directly from the atmosphere. It is estimated that up to 30,000 large DAC facilities would capture some 30 gigatonnes of CO2 per year. Carbon capture utilisation and storage (CCUS) is a technology that can capture up to 90% of the CO2 emissions produced from the use of fossil fuels in electricity generation and industrial processes. Already, operational and infrastructure efficiencies have resulted in a 55% improvement in fuel burn per passenger kilometre since 1990. Retrofitting winglets enables airlines to save more than 4% in fuel, and reduce aircraft noise and NOx emissions, for example. Over 9,000 aircraft have been retrofitted, saving over 100mn tonnes of CO2 since 2000. The overall fuel efficiency of the industry fleet is about 80% better than 50 years ago, IATA noted. Geared turbofan engines and further advances in design will drive a further 15-25% fuel efficiency improvements over the next two decades. But from the mid-2030s, radical new propulsion technologies and advanced designs promise even greater benefits. The first step is likely to be hybrid-electric concepts. When combined with a new airframe body, such as a blended wing, CO2 reductions of up to 40% are possible. Smaller, fully electric aircraft could also appear around this time, IATA points out. Norway has the goal of operating all domestic and short-haul flights electrically by 2040. Electric flights would completely eliminate CO2 emissions. Experts says hydrogen is another possibility. It is lighter than jet fuel but takes up much more space. Much larger tanks and fundamental changes in the aircraft fuel system are therefore needed. Entry into service is envisaged around 2035. New airframe designs will need to be developed to realise the potential of new propulsion methods. A canard wing has the main wing being set further back behind small forewings. These could be in production from 2035-2040. A blended wing uses the entire plane to generate lift, enabling huge fuel savings. Strut or truss-braced wings would enable larger more efficient engines to be used, such as open rotors. Both Airbus and Boeing are working on radical new designs as are other airframe manufacturers. IATA said it is strongly encouraged by the adoption of a Long Term Aspirational Goal (LTAG) to achieve net-zero CO2 emissions by 2050 at the recent 41st Assembly of the International Civil Aviation Organisation (ICAO). IATA’s Director General Willie Walsh said: “The aviation industry’s commitment to achieve net-zero CO2 emissions by 2050 requires supportive government policies. Now that governments and industry are both focused on net zero by 2050, we expect much stronger policy initiatives in key areas of decarbonisation such as incentivising the production capacity of Sustainable Aviation Fuels (SAF). “And the global determination to decarbonise aviation that underpins this agreement must follow the delegates home and lead to practical policy actions enabling all states to support the industry in the rapid progress that it is determined to make.”

Another 800MW will be added to Qatar’s national grid with the completion of two more solar plants being set up at Ras Laffan and Mesaieed by QatarEnergy, said HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi. The solar plants at Ras Laffan and Mesaieed will be inaugurated in 2024, al-Kaabi told a media event at Al Kharsaah Tuesday. The minister said the Al Kharsaah project represents a milestone in Qatar’s energy history and is set to meet 10% of its peak electricity demand at full capacity and reduce CO2 emissions by 26mn metric tonnes over its lifespan. It is also a major step towards Qatar’s goal of achieving production of 5GW of solar power by 2035. Al Kharsaah Solar PV Independent Power Producer (IPP) Project is the country’s first large-scale solar power plant and is set to significantly reduce the environmental footprint. The Al Kharsaah Solar PV Power Plant is owned by a joint venture between affiliates of QatarEnergy Renewable Solutions (60%), Marubeni (20.4%) and TotalEnergies (19.6%). “The site of Al Kharsaah was chosen following extensive scientific studies to determine the sites with the best possible operational efficiency and maximum economic value, placing great consideration to the geological, environmental, and social impacts of establishing this station,” HE al-Kaabi said. Building the plant, HE al-Kaabi said, comes as part of implementing QatarEnergy’s updated Sustainability Strategy, which reemphasises its commitment, as a major energy producer, to the responsible production of clean and affordable energy to facilitate the energy transition. In addition to increasing solar capacity to over 5GW, the strategy targets reducing greenhouse gas emissions, and deploying carbon capture and storage technology to capture over 11mn tonnes per year of CO2 in Qatar by 2035. It also aims to further reduce the carbon intensity of LNG facilities bolstering Qatar’s commitment to responsibly supply cleaner LNG at scale in support of the energy transition In reply to a question on Qatar’s LNG contracts and cargoes, HE al-Kaabi said, "Qatar is absolutely committed to the sanctity of contracts. To us, this is something that is absolutely fundamental to doing business. This is how we have done business in the past…and this is how we will be doing our business in future. “So when we sign with an Asian buyer or European buyers, we stick to that agreement. And that is why for more than 27 years, we have not missed a single cargo of LNG and are trusted by our partners and buyers around the world. "So the volume that will go to Europe is what has been assigned. As far as taking from Asian buyers to take to Europe (that) will not happen." He also said QatarEnergy aims to become the world's biggest LNG trader through organic growth and is already building trading teams, HE al-Kaabi said. "We are just going to keep building that organically. So we are not looking at acquiring a company or anything like that,” HE al-Kaabi noted.