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Qatar going green with bonds, emissions, ESG plans

Formerly named Qatar Petroleum, Qatar Energy (QE), a global top liquefied natural gas (LNG) supplier, is reportedly readying itself to sell ‘green’ bonds in a deal likely to be worth several billion dollars

QE is working on establishing an Environmental, Social, and Governance (ESG) framework QE was able to raise $12.5 billion in its debut bond issuance in late June Qatar's emission reduction plan will be geared to intensify efforts at carbon capture and storage

Formerlyl named Qatar Petroleum, Qatar Energy (QE), a global top liquefied natural gas (LNG) supplier, is reportedly readying itself to sell ‘green’ bonds in a deal likely to be worth several billion dollars, according to Reuters.

In order to accomplish that, QE is working on establishing an Environmental, Social, and Governance (ESG) framework allowing to issue debt earmarked for environmentally friendly uses, though the debt sale is unlikely to happen in 2021.

QE is still proceeding with LNG production investments, having signed a contract last February for the first phase of its North Field LNG expansion project, which aims to boost Qatar’s LNG output to 126 million tons per annum (mtpa) by 2027 from 77 mtpa currently.

The International Energy Agency warned global investors not to fund new oil, gas and coal supply projects if the world wants to reach net-zero emissions by the middle of the century.

Yet, QE was able to raise $12.5 billion in its debut bond issuance in late June, which will go to partly fund capital expenditure by the company and its subsidiaries estimated through 2025 at $80 bn, the prospectus for the June bond sale said.

Interest in ESG-related initiatives and deals has surged in the hydrocarbon-rich Gulf amid growing awareness among global investors about the dangers of global warming.

Both the Saudi government and its sovereign wealth fund have hired advisers this year to help structure similar ESG frameworks.  

Saudi became the second Gulf country to announce a net-zero emissions target by 2060 immediately following UAE’s 2050 date for such a goal. Saudi has an estimated 265 billion barrels of oil reserves worth $22.5 trillion at current prices. Half of Saudi Arabia’s revenue comes from oil, with $150 bn expected this year alone as prices climb to $85 a barrel.

Qatar would not commit to net-zero.

Qatar’s emissions’ reduction plans

Similar to UAE’s ADNOC pledging to decrease its greenhouse gas emissions by 25% by 2030, Qatar’s ministry of environment and climate change recently launched a national climate change action plan aimed at achieving a 25% reduction in greenhouse gas emissions, also by 2030.

The plan also envisioned reducing “carbon intensity” of its liquefied natural gas facilities by 25% by the same year.

It says its gas production helps combat climate change globally because it can help the world shift from high-polluting fuels like oil and coal to renewable energies.

Qatar oil
Image source: Doha News

Yet, its emission reduction plan will be geared to intensify efforts at carbon capture and storage at its gas production facilities.

Qatar’s total greenhouse gas emissions were recorded to be 116.2 million tons (Mt) of carbon dioxide equivalent (CO2-e) in 2019.

Peak emissions were reached in 2016 at 120.91 Mt.

The energy sector was the largest culprit of greenhouse gas emissions in 2019, making up 98%, 114.3 Mt CO2-e out of 116.2 Mt, of total net emissions.

Speaking at a forum in Riyadh, ADNOC CEO Sultan Al-Jaber called on people to be “a bit mature and sober” in discussing the energy transition, insisting it will take time and must include oil and gas.

“We can’t just come out of nowhere and all of a sudden speak about energy transition and completely ignore or underestimate the impact of oil and gas in helping meet global energy requirements,” Al-Jaber said, noting that 80% of total energy requirements currently come from fossil fuels, with 60% of that oil and gas.

OPEC forecasts oil will remain the world’s No. 1 source of energy through 2045. It forecasts that of the 2.6 billion cars on the road by 2045, just 20% will be electric-powered.

Scientists say the world must invest in renewable energy to limit warming to 2.7° F (1.5° C).

Qatar’s other green initiatives

Qatar was also active on other climate-friendly initiatives and actions. Almost 290-gigawatt electricity and 32 million cubic meters of water were reduced last year thanks to Qatar’s National Program for Conservation and Energy Efficiency, aka Tarsheed.

Meanwhile, authorities are also working towards transforming public transportation to full-electric, including public bus services, government school buses and Doha Metro’s buses.

An integrated network of electric car chargers is also being integrated across the country in order to support the ministry’s plan to gradually transform the electric transport system.