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The sheikdom has an abundance of reserves to meet its long-term target but its bitter political dispute with Gulf neighbors, primarily over Qatar's alleged support of extremist groups, has brought some unwelcome complications and the bickering could be set to intensify in 2018.

LNG export forecast from Qatar, Australia and the US

Potential investors in Qatar's energy may have to weigh carefully the risks of increasing their exposure if a trade and travel blockade imposed by Saudi Arabia, the UAE and Bahrain continues deep into the new year.

International oil companies have faced logistical problems, such as not being able to take direct flights from the UAE, Bahrain and Saudi Arabia.

However, this has not translated into cutting back investments.

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Since the embargo began, senior Qatari officials have sought to dismissed concerns that international oil companies (IOCs) may cool on making any further investments.

"For now the pressure has not been placed seriously and Qatar has chosen friends who will support them," Fereidun Fesharaki, chairman of FGE consultant, told S&P Global Platts. "They have no problem attracting investment unless there is a ratcheting up of sanctions."

Qatar is the world's largest shipper of LNG and a major recipient of foreign direct investment from the world's top IOCs, such as Shell, ExxonMobil and Total.

Its main resource is the North Dome gas field, the world's biggest offshore deposit holding an estimated 900 Tcf of the fuel.

For most of the last decade until it was lifted in April 2017, Qatar had imposed a strict moratorium on its further development.

Less than a month after the ongoing Saudi-led embargo began, Qatar announced plans to boost LNG capacity by around 30% to 100 million mt/year within the next five to seven years, up from 77 million mt/year currently.

Studies are continuing but the expansion could be achieved by building new LNG production trains along with debottlenecking Qatar Petroleum's 14 existing trains.

Engineers at Japan's Chiyoda are working on the studies, which will determine how much this would add.

Corporate rationalization of the country's energy industry may help. Qatar now has a single entity producing and marketing its LNG, following on from the year-long process of merging the state's two previous companies, Qatargas and Rasgas.

The new super-producer, also called Qatargas, started operations as of January 1.

As well as adding more gas, the new trains will also produce as much as 200,000 b/d of new condensate, most of which will be for export.

This will be a major boost for state's condensate exports, which are currently 300,000 b/d to 400,000 b/d.

Qatar will also start extracting ethane from its gas to use as feedstock in a new 1.6 million mt/year petrochemicals plant, which QP hopes will be ready by 2024.

QP absorbed its overseas subsidiary, Qatar Petroleum International, in 2015, and since then it has been acquiring new licenses across the world.

It won the rights to Brazil's offshore Alto de Cabo Frio-Oeste block in consortium with Shell and China National Offshore Oil Co, as well as Cyprus' offshore Block 10 with ExxonMobil.

POLITICAL PRESSURE


So far, Qatar's energy industry has succeeded in overcoming the blockade. Officials say not a single cargo of oil or LNG has been delayed.

Finance minister Ali al-Emadi said December 5 that the state was "outperforming all the GCC economies" and forecast as much as 3% growth in 2018, despite the embargo.

In September Qatar, reported 555,000 b/d of product exports, its second-highest level ever.

"The illegal actions of our neighbors have been the catalyst for us to accelerate our economic plans and renew our commitment to diversification and sustained growth," the minister said.

"We fully expect to see a strong return of the Qatari economy this year and growth over the years to come," said Sheikh Saif al-Thani, the director of Qatar's Government Communications Office in a statement.

Meanwhile, the political dispute between the Gulf's Arab nations shows few signs of easing.

Just a day before the annual Gulf Cooperation Council (GCC) meeting in December, the UAE announced the formation of a new pact with Saudi Arabia, to coordination on military, political, economics, trade and cultural affairs.

The announcement seemed to undermine the GCC, which also includes Qatar.

Despite efforts to mediate by the US and Kuwait, there appears no desire to back down in Doha.

The sheikdom has been accused by Riyadh of allegedly supporting extremist groups and acting against its interests in the region.

The Qatar crisis could go on for years, said Nick Stadtmiller, lead analyst for Saudi Arabia and GCC macro coverage at Medley Global Advisors.

"I think the endgame is for the GCC to become moribund and a new council of Saudi Arabia, the UAE and Bahrain (possibly with Kuwait as an affiliate) to pick up the reigns," Stadtmiller added.

While Saudi Arabia is unlikely to take direct military action against Qatar due to US pressure, Stadtmiller said he expected Riyadh to continue pushing for regime change.

"In fact, they have been trying periodically for the past twenty years. The number of coup attempts I have heard of in Qatar so far this century is scary," he said.