Sheikh Hamad: The Emir who transformed Qatar into an energy giant

Qatar's journey from a small Gulf oil producer to the world's LNG leader was shaped by Sheikh Hamad's energy strategy and long-term global partnerships

Not even one molecule of gas was exported from Qatar in 1995, when Sheikh Hamad bin Khalifa Al-Thani took power as Emir of the Gulf kingdom. By 2006, Qatar had become the world’s largest exporter of liquefied natural gas (LNG) and held this position for over a decade. Almost 20 per cent of global gas exports were still sourced from Qatar until the ongoing US-Iran war blocked shipments with severe consequences felt worldwide. 

Sheikh Hamad abdicated the throne in 2013 and thereafter only held the affectionate title of “Father Emir”. Yet, India and many countries marked his passing away on July 12 with official mourning, and personal tributes. 

In 2004, India’s first imports of LNG came from Qatar; 40 per cent of our imports still came from that country till February when supplies stalled, hitting India’s fertiliser and ceramics industries, among others. Customers elsewhere, who use gas extensively for power generation and heating, are even more adversely affected by price hikes and shortages. The trajectory of how this small Gulf country became so crucial to the world’s gas trade is closely associated with the career of its former Emir. 

In 1977, when Sheikh Hamad became the Crown Prince, Qatar was one of the Organisation of the Petroleum Exporting Countries (OPEC)’s minor players, with exports of 400,000 barrels per day-about 5 per cent of that of Saudi Arabia. It lived in the shadow of the major oil producers around it, as it had oil reserves miniscule in comparison to theirs. What it did have, however, was natural gas, lots of it. Without a way of selling it.       

 As early as 1971, exploration by Shell had identified the giant gas dome (now known as the North Field) in shallow water offshore Qatar, extending across the Gulf into Iranian waters (where it is called South Pars). But it was a non-associated gas field — with no oil beneath the gas and condensate — while the international oil companies and Qatar wanted oil! Qatar was too far away from major gas markets for pipelines, and LNG trade was limited. 

When Qatar joined other Gulf states in nationalising hydrocarbon production in the late 1970s, Shell walked away from plans for development of LNG export infrastructure. Qatar formed the Qatar Gas Co. in 1984, but ran into financial headwinds. The 1986 oil price collapse led to severe economic austerity and domestic discontent. Legends abound that the then Emir decreed that he himself had to sign cheques for budgetary expenditure above $50,000! 

The Crown Prince became the Chairman of the Supreme Council for Planning in 1989. He then began his partnership with a remarkable Qatari professional, Abdullah bin Hamad Al Attiyah, who effectively led Qatar’s energy ministries for 20 years.

With budgetary funds being minimal, LNG development followed a ‘do what has to be done’ approach. 

Qatar pledged future oil revenues as collateral, as a consortium including Japanese trading firms began investment. The Japanese link led to a big Japanese electric utility, which in 1992 signed the first confirmed offtake agreement, a decisive moment for LNG projects. Involving Mobil from the US in the consortium brought in not only LNG experience but a US strategic interest in the project. 

Simultaneously, good working relations were maintained with Iran since the gas field is shared with that country, and legal or operational disputes which could delay development had to be avoided.  Al-Attiyah (who also passed away recently) focused energy diplomacy on Asian countries believing they were the demand drivers for the future. Success came first in Korea, and then in India. 

Qatar’s LNG development in the 1990s proved a qualitatively different experience from oil production. 

Building liquefaction plants, cryogenic storage tanks, and an entirely new port to facilitate shipment on specialised cryogenic tankers led to a huge influx of foreign technicians, construction crews, bankers, traders and a variety of professionals. The population boomed and economic and social life began to witness a sweeping change. The old Emir was unable to adjust to the new realities, becoming increasingly unpopular and an obstacle to Qatar’s growth. In 1995, Sheikh Hamad took over in a bloodless coup. From 1996, when LNG export revenues began to flow in, the economy was transformed; and with it, Qatar’s international profile. In 2001, Qatar hosted the World Trade Organisation ministerial conference, which launched the ‘Doha Round” of negotiations. 

By 2013, when the Emir handed over power to his son, Qatar had developed LNG export capacity of 77 million tonnes per annum, close to 30 per cent of the world total. Its GDP had boomed by 2,000 per cent to $180 billion, making Qataris statistically the richest on earth with per capita GDP about $100,000!   

The years since have seen Qatar expand its influence through investments by its sovereign wealth fund, one of the wealthiest in the world. It exercises soft power by hosting international events such as the FIFA World Cup in 2022. It believes being internationally relevant adds to its own security, and has sought a mediatory role in various conflict areas in West Asia and Africa. It is still involved in the on-again, off-again diplomacy to end the current US-Iran war. Whether it succeeds or not, it will be recognised that its reach is founded on its growth from an oil minnow, to a gas giant. Led mostly by the Emir it has just bid farewell to.  

The writer is a former diplomat