Qatar seeks solution to settle $11 billion debt by 2023

September 26, 2023 3:24 pm

Qatar enjoys the status of being amongst the biggest LNG exporters globally, as it plans to become the largest natural gas provider by 2030.

Doha has allegedly approached international banks to negotiate refinancing more than $10 billion in debt due in 2023, according to Bloomberg—which received the information from three people familiar with the situation.

Officials at the country’s Ministry of Finance (MoF) are holding discussions with international banks regarding a “potential syndicated loan or bond sale,” according to the sources who chose to remain anonymous, as they are not permitted to announce the matter publicly.

They explained that there has not been an ultimate decision, as the government may either choose to refinance the debt partially or push the matter to a later time, since Doha enjoys “financial flexibility.”

Read also: US outranks Qatar as world’s top LNG exporter for first time ever

Financial flexibility is best described as an entity’s capacities to react to unexpected expenses and investment opportunities. Organizations with robust financial flexibility are able both to endure difficult economic times as well as benefit from unexpected investment opportunities.

Bloomberg reported that a spokesperson for Qatar’s MoF noted that Doha did not have immediate plans to refinance the debt. The ministry “is always in talks with banks to assess market conditions for possible debt issuance as part of our normal liability and fiscal management exercise,” the spokesperson said.

Fiscal deficit 

Syndicated loan portions in the Gulf region exceeded a record of $113.5 billion in 2021, according to data assembled by Bloomberg, as sovereign and corporate issuers took the initiative to step in and benefit from the easy financing conditions and cheap liquidity.

Doha expects a fiscal deficit of approximately 8.3 billion QAR ($2.3 billion) this year at a supposed oil price averaging to $55 per barrel.

The country, which is one of the largest liquefied natural gas (LNG) producers worldwide, expects gas—a cleaner alternative to oil and coal, to remain a significant and an integral element in the global economy for a long time.

As such, Qatar is spending an estimated $30 billion to bolster its LNG production capacity by approximately 50% in the next six years.

The Gulf state is arranging to release its first ever green bond this year as it intends on tapping into a “booming global market for sustainable debt.”

“It’s investing billions into clean energy in an effort to transition from being one of the top carbon emitters globally on a per capita basis,” Bloomberg added.

Qatar’s LNG capacity

In 2019, Qatar was the biggest LNG exporter worldwide, with total gas supplies reaching 110.2 BCM (billion cubic meters), according to data from S&P Global Platts Analytics.

Qatar currently has an LNG production capacity of approximately 77 million mt/year, but has plans to boost it to 110 million mt/year (metric tonne per year). It seeks to further advance this rate through its North Field East (NFE) and North Field South (NFS) expansion projects.

Categorised in: Luxury Real Estate