Qatar is showing few signs of the world economic crisis, even as others struggle with debt, stalled projects and the collapse in oil prices. The force driving Qatar: A virtual pipeline to carry vast holdings of Gulf natural gas to energy-hungry consumers in faraway places like Britain and the United States - a project Qatar is determined to pursue despite the global slowdown. Here in Ras Laffan, an hour's drive through bleak desert north of the capital, Doha, sits the country's multibillion-dollar gas bet on its future. The export route is set to grow much wider, solidifying Qatar's place as the world's biggest liquefied natural gas exporter. This week, Qatar's emir inaugurated the latest in a series of mammoth new production facilities that aim to more than double the country's annual output of LNG to 77 million tons by decade's end. But from an energy producer's point of view, it is hard to imagine a worse time to come online. The global economic meltdown is killing demand for energy including LNG - a supercooled form of the cooking, heating and power-generation fuel condensed into liquid for easier transport by ship. “Because you have weakening demand, you're going to have a lot of LNG on the seas trying to find a home,” said David Dugdale, an energy analyst at MFC Global Investment Management in London. Francisco Blanch, a Banc of America Securities-Merrill Lynch commodity strategist, summed up the problem in a report this week: The world, he said, is “swimming in liquid gas.” Blame it on the economic meltdown. Demand for manufactured goods built in factories powered by natural gas-fueled electricity is tumbling. At the same time, penny-pinching consumers are looking to trim their utility bills. Other countries are racing to profit from LNG. Indonesia, Russia and Yemen each have LNG projects due to start this year, adding to the oversupply. Global recession or not, Qatar is determined to press ahead with its gas plans. Added capacity will also give Qatar better economies of scale to undercut smaller producers in the US. “I am confident we can manage the glut,” Qatar Energy and Industry Minister Abdullah bin Hamad al-Attiyah said earlier this week. Qatargas 2, the $13.2 billion project inaugurated Monday, is loaded with superlatives. The production equipment - the world's largest - is more than twice as big as previous models. Purpose-built tanker vessels are so tall and fast the company's head says they should thwart pirates that threaten their route around the Arabian Peninsula.
