Thursday, December 27, 2018 Rabia II 20, 1440 AH FED CONCERNS: Page 12 Currency traders GULF TIMES on front line as markets stay wary BUSINESS of US headwinds Corrigendum Doha Bank successfully closes $525mn syndicated term loan LNG output surge of 43% In the report published in yesterday’s Gulf Times (Business Page 1) on Doha Bank’s syndicated term loan closure, the amount was erroneously mentioned as QR525mn in the headline instead of $525mn. The correct headline should read as “Doha Bank successfully closes $525mn syndicated term loan”. by 2024 to drive Qatar’s The error is regretted. - Editor next development phase As oil prices plunge, Opec By Pratap John In September, Qatargas an- Chief Business Reporter nounced a long-term sale and purchase agreement (SPA) with output is at risk PetroChina International Com- atar’s decision to step up pany Limited to supply China with annual liquefi ed natural gas around 3.4mn tonnes of LNG a from unrest Q(LNG) production capac- year. ity by 43% to 110mn tonnes within Under the 22-year agreement, fi ve years was among the energy which ends in 2040, Qatargas will Bloomberg sector highlights of 2018, a year in supply LNG from the Qatargas 2 London which the country also opted out project, a joint venture between of Organisation of the Petroleum QP, ExxonMobil and Total, to dif- Exporting Countries (Opec), which ferent receiving terminals across il’s plunge has taken prices below the level all it joined in 1961, one year after the China, with the fi rst cargo to be de- but one Opec country needs to square their organisation’s establishment. livered later this month. O2019 budgets, increasing the risk of supply dis- The new LNG capacity increase Qatargas made inaugural de- ruptions from economic dislocation and social unrest. will further strengthen Qatar’s livery of LNG to Pavilion Gas, a At the Brent price of $55 a barrel, only Kuwait will be leading position as the world’s wholly-owned subsidiary of Pa- able to make ends meets next year. Opec giants Saudi largest LNG producer and exporter, vilion Energy in April this year. Arabia, Iraq and Iran need much higher prices. So do and will further boost Qatar Petro- The shipment was delivered to the the nations that have suff ered disruptions in the past leum’s (QP) strategic growth plan. Singapore LNG Receiving Termi- when prices have fallen: Libya, Venezuela and Nigeria. This production jump is expect- nal on Jurong Island onboard the As prices have dropped, the market has focused on ed to have a great impact on Qatar’s Qatargas-chartered Q-Flex vessel the impact on US shale growth next year, but recent economic growth and help stimu- ‘Al Oraiq’. history points to rising risks within the group. As oil late the country’s local economy. The file photo taken on February 6, 2017 shows the Ras Laff an Industrial City, Qatar’s principal site for production On January 1, 2019, Qatar will revenues fall, governments could soon face social un- The capacity enhancement will of LNG and gas-to-liquids, some 80km north of Doha. The new LNG capacity increase will further strengthen formally withdraw from Opec. The rest due to slower economic growth and higher unem- be achieved through four LNG Qatar’s leading position as the world’s largest LNG producer and exporter, and will further boost QP’s strategic decision to withdraw from Opec ployment. They’ll also have far less money to invest in trains, each one of nearly 8mn growth plan. was announced by al-Kaabi in the petroleum sector to keep output up. tonnes per year capacity. LNG de- Doha on December 3. “At current prices, too much attention on shale, not livery from the new project is ex- be part of a new world scale petro- The agreement covers the Amo- This is the second presence for Qatar was the fi rst country to enough on Opec,” said Olivier Jakob, managing direc- pected either in end-2023 or early chemicals complex at the Ras Laf- ca, Mizton, and Tecoalli off shore oil QP in Mexico. At the end of Janu- join Opec after the fi ve founding tor at Swiss consultant Petromatrix GmbH. 2024, HE the Minister of State for fan Industrial City. fi elds, which lie in Area 1 in Mexi- ary this year, QP won exploration nations – Iran, Iraq, Kuwait, Saudi In late 2015, when oil prices plunged after Saudi Energy Aff airs, Saad bin Sherida The petrochemicals complex co’s Campeche Bay. rights in fi ve off shore blocks in the Arabia and Venezuela – formed Arabia imposed a “pump-at-will” policy that fl ooded al-Kaabi said in September. will include an ethane cracker with Perdido and Campeche basins as the group in 1960. It’s the fi rst the market, social trouble spread across Opec, send- The new project will produce a capacity of more than 1.6 mtpy part of a consortium comprising Middle Eastern nation to leave the ing supply outages to a peak of 2.8mn bpd – though about 32mn tonnes per year (mtpy) of ethylene, making it the “largest Year-end Review Shell and Eni respectively. group. the number was exacerbated by Western sanctions on of LNG, 4,000 tonnes per day of ethane cracker” in the Middle East, In line with its growth plans, this Qatar is Opec’s 11th-biggest oil Iran. Lower prices accelerated the decline of Venezue- ethane, 260,000 barrels per day of and among the largest in the world. opportunity represents another producer, accounting for less than la’s oil industry and saw the re-emergence of violent condensate, and 11,000 tonnes per The petrochemicals complex The agreement, however, is sub- step in implementing QP’s strategy 2% of total output. confl ict in Nigeria’s main crude-producing region. day of LPG, in addition to approxi- will also include world-class deriv- ject to customary regulatory ap- to expand its international foot- “Qatar’s decision to exit Opec is Since then, even with new US sanctions on Tehran, mately 20 tonnes per day of pure ative plants, which will consolidate provals by the government of Mex- print, and to pursue Latin America not political, it was purely a busi- Opec supply outages have fallen to less than 1.7mn helium. Qatar’s position among the leading ico. Following such approval, both as an important core area for its ness decision for Qatar’s future bpd, according to Bloomberg News calculations based This will increase Qatar’s total petrochemicals producers in the Eni and QP will jointly hold 100% upstream activities. strategy towards the energy sec- on data from the US Energy Information Administra- production capacity from 4.8mn to world markets. interest in the Area 1 production QP’s international upstream tor,” QNA quoted al-Kaabi as say- tion. 6.2mn barrels of oil equivalent per Earlier this month, QP entered sharing contract, according to QP. footprint has been expanding re- ing. Despite the sharp fall over the last two and a half day. into an agreement with Italy’s Eni The deal marks another mile- cently in Brazil, Mexico, Argen- He had also said the global oil months, oil prices remain well above the depths of This year Qatar also announced to acquire a 35% participating in- stone for QP as it strengthens its tina, Cyprus, Congo, South Africa, market will not be aff ected by the 2015-16 crisis. Brent crude, the global benchmark, fell its plans to build the Middle East’s terest in three off shore oil fi elds in international footprint and ex- Mozambique and the Sultanate of move, since Qatar “is not a high last Thursday to a low of $54.65 a barrel, compared to biggest ethane cracker, which will Mexico. pands its presence in Mexico. Oman. volume producer of oil”. $27.10 in January 2016. World economy is set to feel the delayed trade war pain in 2019 Bloomberg Bank of America Merrill Lynch estimates that Huawei Technologies Co chief financial off icer Hong Kong/Washington the trade war news has accounted for a net Meng Wanzhou illustrates the risk of unex- drop of 6% in the S&P 500 this year. China’s pected developments that can quickly inflame stock market has lost $2tn in value in 2018 and already tense relations. While 2018 was the year trade wars broke out, is languishing in a bear market. “‘Trade divergence’ since 2018 and the ‘Tariff s- 2019 will be the year the global economy feels Recent data underscore concerns that trade Limbo’ into 2019 are likely to keep a high the pain. will be a drag on American growth next year. degree of uncertainty and continue to have an Bloomberg’s Global Trade Tracker is softening US consumers are feeling the least optimistic impact on trade and investment plans,” New amid a fading rush to front-load export orders about the future economy in a year, while York-based Citigroup global markets econo- ahead of threatened tariff s. And volumes are small business optimism about economic mist Cesar Rojas wrote in a recent note. tipped to slow further even as the US and improvement fell to a two-year low and com- The critical question is whether Washington China seek to resolve their trade spat, with panies expect smaller profit gains in 2019. The and Beijing can strike a deal by the March 1 companies warning of ongoing disruption. International Monetary Fund forecasts trade deadline. If they succeed, a cloud will be lifted Already there are casualties.