Inside the Qatar and the UK romance

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Image Source: Bloomberg

People are upset that Qatar will host the World Cup because of how it treats women, LGBTQ+ people, and migrant workers. People have asked about the attendance of officials, teams, and fans. But the UK’s relationship with Qatar goes far beyond this tournament and affects most of us somehow.

Some people might wonder if it’s right to have close ties with a government whose values seem to be at odds with those of the UK.

Gas is at the heart of this relationship. Qatar is a small country about the size of Yorkshire. It has one of the world’s largest natural reserves, and the UK is one of its most important customers.

About half of the UK’s gas comes from other countries, and about half of that comes from Norway through a pipeline. But Qatar is second on that list. About 9% of the energy that the UK imports come from Qatar. In theory, that’s the amount needed to power the boilers of about a million British homes. So, Qatar has become an essential part of the British energy mix in less than 20 years.

Qatar used its growing wealth from gas to become a part of the UK’s business world and build relationships with the top people in the British establishment.

The Emir, the country’s ruler, was one of the few Gulf leaders to go to the funeral of Queen Elizabeth. In 2015, a former Qatari political leader gave more than £2 million to the current King’s charity foundation.

Qatar and the UK have stronger ties

The air forces of both countries have joined together to make two squadrons, one flying over World Cup venues.

And as part of a $5 billion deal with BAE systems, Qatar took ownership of 24 fighter jets made in Lancashire in September.

The Qatari government has been investing money in the UK to get it back. It’s not one of the most prominent investors, but it picks its holdings carefully to get the most attention and power. It is one of the 12 largest owners of property in Britain.

The Canary Wharf Group, which owns landmarks like 20 Fenchurch Street, also known as the “Walkie Talkie,” and the Shell Centre redevelopment on London’s South Bank, is at the center of its property empire.

The Qatari government owns the 5-star hotel Claridge’s and the high-end department store Harrods.

Beyond oil

Qatar owns many shares in some of the biggest brands in the UK. You can bank with Barclays, shop at Sainsbury’s, or get benefits from Heathrow Airport and Qatar. For example, your bill helps the company make money when you use Severn Trent water.

In total, Qatar’s state investment arm has put about £40 billion into areas affecting millions of Britons’ lives. These investments are meant to ensure that this small country’s influence on British soil is much more substantial than it would be if it were much bigger.

In the meantime, the UK could depend more on gas from Qatar. This is because the UK government has been building up its relationship with Doha to ensure there is always enough oil to go around as North Sea reserves run out.

In the past few months, Britain has been able to stop importing from Russia. This was only about 4% of all the gas used in the UK, but it makes Qatari gas even more important.

The EU is much more dependent on Russian gas, making finding alternatives even more important.

Qatar only supplied 5% of the EU’s gas, but that could change. Olaf Shultz, the chancellor of Germany, which uses the most gas in the EU, said that Qatar would be a vital part of the country’s plan to move away from Russian gas. But it won’t happen overnight.

Talks about contracts have been hard. Qatar likes to sell gas in long-term deals that last 15 to 20 years. This may not fit with Western countries’ plans to eliminate carbon emissions.

On the other hand, China has announced a 27-year deal to buy $60bn worth of Qatari gas. This is less ambitious than China’s net-zero plans. And Germany needs to improve its infrastructure, including the terminals that receive LNG (liquified natural gas), so it can take in more supplies.

In the second case, Qatar has helped the UK get ahead of the game. The country owns most of the South Hook terminal in Wales, where it unloads LNG into special containers. The Qatari government is spending millions on increasing the site’s capacity by a quarter by 2025. It is said that the site can hold a fifth of the UK’s daily gas needs.