The South Pars / North Dome Gas-Condensate field is not well known, but it is easily the largest gas field in the world. It is so large it is as big as the other top 20 gas fields combined. It covers a massive 10,000 sq km situated 3000m below the middle of the Persian Gulf. Australia may be close to exporting the largest amount of gas in the world but Qatar remains the biggest producer. Qatar owns over three-fifths of the gas-concentrate field it calls the North Dome (or North Field). The Iranians call it the South Pars and they own 37 per cent of what is 51 trillion cubic metres of natural gas and 50 billion barrels of natural gas condensates.
The Iranians discovered the field in 1990 but took years to start drilling while recovering from the Iraqi war. Qatar, which had little prior involvement in gas, started drilling its side in the early 2000s building an industry up from nothing to become one of the largest gas exporters in the world. Since 2010 Iran has also been developing the field.
By 2005 Qatar was worried the field was haemorrhaging gas too quickly, and called a halt to new development. Initially a five year moratorium it eventually lasted 12 years. They continued drilling at existing North Dome fields and made a lot of money – it accounts for nearly all of Qatar’s gas production and 60 percent of export revenue – but it developed no new projects.
Until 2017, that is. With existing fields starting to draw down, Qatar saw its market share drop after Australia’s east coast export terminal at Gladstone opened in 2014, and Russia and the US aggressively expanded gas production. Qatar’s problem is that any new fields at North Dome are likely to be closer to the Iranian sector so it requires greater co-operation and information. Iran suffers severe domestic gas shortages and made a rapid increase in South Pars production a top priority following the end of international sanctions and a deal with France’s Total last year.
Qatar’s ties with Iran have not pleased giant neighbour Saudi Arabia. Qatar was long regarded as a Saudi vassal state but started moving independently when emir Hamad Al Thani toppled his pro-Saudi father Khalifa Al Thani in 1995. During Hamad’s 18-year rule, Qatar turned away from Saudi oil and focused on gas at North Dome. Natural gas production reached 77 million tonnes, making Qatar the richest country in the world per capita. Because of North Dome’s strategic location, Qatar promoted a regional policy of engagement with Iran, Saudi Arabia’s biggest enemy. It didn’t help that Qatar won the 2022 World Cup rights while news station Al Jazeera was a thorn in the side of most regimes in the region.
Qatar’s balancing act between the regional superpowers has occasionally exasperated the US. Al Udeid Air Base near Doha hosts 11,000 US military personnel – the largest concentration of American forces in the Middle East. But Qatar has occasionally supported Hamas in Lebanon, the Afghan Taliban, and the Egyptian Muslim Brotherhood. The emir’s ties with Obama and Ahmadinejad led State Secretary John Kerry to exclaim in 2009 “Qatar can’t continue to be an American ally on Monday that sends money to Hamas on Tuesday.” But armed with gas resources, Qatar has been able to keep the US onside while managing to weave a path between Iran and Saudi interests. Qatar has also played a back-channel role with Iran in the Syrian war, brokering hostage and prisoner exchanges, and paying millions of dollars to insurgent and militant groups to the growing distress of Saudi Arabia.
The opportunity for the Saudis to strike back came after new US president Donald Trump’s visit to the kingdom. Trump offered an arms deal and publicly praised their stance on Iran and the Muslim Brotherhood. The emboldened Saudis saw his support as the signal for an attack on Qatar. Within days Saudi Arabia, Egypt, UAE, Bahrain and Yemen severed ties claiming Qatar supported Sunni terrorism and Iranian designs on the region. All but Egypt, which has 250,000 workers there, ordered their citizens to leave Qatar.
As usual with Trump, his administration’s response has been muddled. When the Saudis declared the blockade, Trump supported it in tweets calling Qatar a “funder of radical ideology”. His words caused alarm and countervailing moves from the Pentagon and state department. Within days the US signed a $12 billion deal to supply dozens of F-15 jets to Qatar.
Then the Saudis delivered a new list of ultimatums to Qatar including the closure of Al Jazeera, none of which Qatar looks likely to meet. Nor will Turkey agree to pull its forces from Qatar. As long as the gas flows at South Pars / North Dome, Qatar is unlikely to buckle. Iran is increasing production while Qatar Petroleum has signed an agreement with Japanese engineering company Chiyoda to identify modifications required to increase capacity at Qatar’s LNG trains at Ras Laffan by next year. It will continue to provide gas to Europe via the Suez Canal and the Gulf via the Dolphin Pipeline.