Qatar: The Gas King of the Middle East

Editor's Note: This is the second in an exclusive series of columns Chris Edmonds will be filing from a 10-day business trip through the Middle East.

DOHA, Qatar -- Qatar has gas and lots of it.

While the country is among the smallest land masses in the Middle East (only 11,437 square kilometers), it is home to the North Field, the largest known natural gas field in the world. The field is believed to contain 900 Tcf of recoverable gas reserves, or nearly 14% of total worldwide reserves.

Moreover, the field extends into the territorial waters of Iran, where it is referred to as the South Pars field. Combined, the field is believe to hold 1,180 Tcf of recoverable reserves, or nearly 20% of global natural gas reserves.

The implications for Qatar are significant. With a population just under one million, development of the North Field may well create an economy with the highest per capita GDP of any nation in the region and, perhaps, the world. With the reserves in the North Field, Qatar ranks third -- behind only Saudi Arabia and Iran -- in the level of hydrocarbon reserves. However, with a population of less than 3% of Saudi Arabia and less than 1% of Iran, the impact on the people of Qatar could be dramatic.

While not as frenetic as the growth in Dubai, growth in Qatar's capital city of Doha is astonishing. In addition, the Qatari government -- governed by Amir Hamad bin Khalifa al-Thani -- has committed significant resources to the betterment of its people, including education and health care systems built on Western models.

Several U.S. universities, including Carnegie-Mellon, Virginia Commonwealth, Texas A&M, Cornell and Georgetown, have established campuses in University City, a unique multi-venue educational center on the edge of Doha.

Qatar's gas reserves have even larger implications for the world. Between the QatarGas and RasGas liquefied natural gas (LNG) projects, Qatar is likely to control nearly 25% of all LNG production by 2015. Given current announced projects, the country will have the capacity to produce nearly 80 million tons of LNG annually, or just over 10 billion cubic feet of gas per day, nearly one-sixth of current U.S. gas demand. Moreover, production from the field appears to be long-lived, providing relative certainty to future production estimates.

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At time of publication, Edmonds had no positions in stocks mentioned, although holdings can change at any time.

Christopher Edmonds is managing principal at Energy Research & Capital Partners, an energy investment firm and an affiliate of FIG Partners. He is based in Atlanta. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.