Energy Transitions and the Potential Implications on the LNG Market: Qatar as a Case

The LNG market and Qatar are examples of a symbiotic relationship, growing together for decades. Making the most of the plentiful gas resources in the North Field, Qatar capitalized on the LNG exports as the primary source of income, boosting its extraordinary economic expansion and development. However, gas is an exhaustible resource with polluting carbon emissions and is subject to demand changes and crises in other countries. This study proposes evaluating Qatar's strength and resilience as an exporter of LNG. Based on the LNG export capacity, energy market trends, and sustainability concepts, this work aims to investigate Qatar's potential scenarios, optimal policy, and strategy suggestions. The analysis starts with two qualitative methods prevalent in the management world: a) Porter Five Forces Analysis (PFFA) and b) SWOT assessment, to analyze power positioning among stakeholders and future LNG expansion projects. On the quantitative side, this dissertation leverages the relatively novel Agent-Based Modeling (ABM) to propose strategic, geopolitical scenarios for the future LNG market. The ABM scenarios work as stress tests for Qatar and other agents to see how they should and would respond to future potential crises, bottlenecks, fluctuations, and dynamics. The strategic qualitative analysis reveals factors that make Qatar the top LNG exporter. Qatar's resilience comes from using first-move advantages and competitive reinforcing loops. Qatar wisely associated with international oil and gas companies; then, it learned that investing big in a high upfront costs business was crucial for economies of scale. The vertical integration of the LNG value chain, with a unified direction providing different services, turned Qatar into a highly efficient and profitable exporter. These factors created positive synergies, differentiating Qatar from the oil-producing neighbors. Qatar's strength and resilience are also functional for moments of crisis and market depression, like the Covid-19 economic recession. Qatar holds the leadership in the LNG model simulations because of the superior economics and streamlined service chains. Qatar may lose market share as the rest of the competitors increase their LNG production. Yet, as it increases LNG productive capacity, Qatar readily recovers exports, markets, and positions, exporting globally and fully using its nominal liquefaction capacity. Under stress tests, like the closure of chokepoints or alternative routes like the Arctic corridors, Qatar is still very resilient, not losing cargoes and always using its total capacity effectively, unlike the other exporters. The only critical scenario for Qatar is the closure, or similar incidents, of the Strait of Hormuz, which would commercially isolate the Arabian Gulf countries from the rest of the world and deprive the world of the oil and gas exports from the Middle East. Nevertheless, such a scenario is improbable. The simulations, analysis, and discussions point out the exporter robustness of Qatar; however, they do not mean that Qatar should continue this business model indefinitely. Qatar should develop other industries and sectors, rely less on natural resources exports, and create synergies among different economic sectors, making them sustainable. Qatar may wisely use the LNG revenues, avoiding the Dutch disease faults and waste of resources to make the most of a finite resource like NG. Qatar would continue to play the leading role in the LNG market, regulating other exporters, shifting exports among different regions, and contributing to the energy transition towards renewables by promoting the use of NG as an energy-bridge resource.