out of court, and the aged father found a new life for himself based in London.11
Now in power, Sheikh Hamad initiated a far-reaching program of modernization and reform, ranging from permitting women candidates in municipal elections to the opening in Qatar of the Mideast branches of New York’s Weill Cornell Medical School, Georgetown University’s School of Foreign Service, and Texas A&M University. Qatar became home to the forward headquarters for the U.S. Central Command, which has responsibility for the Middle East. It also became home to, and indeed financed, the Al Jazeera satellite news network.
The emir was determined to turn his small Persian Gulf principality into a global energy giant, based on LNG, with the revenue stream that would go with it. Accelerating LNG was the way to do that. But a huge amount of money would have to be invested. That meant that LNG costs—considered absolutely irreducible—had to be reduced. Even so, the capital costs would be enormous. “The more I learned about Qatar,” recalled Lucio Noto, former CEO of Mobil, “the more I realized the scale was beyond the capacity of an individual company.”12
The merger of Mobil with Exxon in 1999 made the great expansion much more doable. The combination brought critical Mobil assets—the gas resource, LNG expertise, and relationships—together with Exxon’s financial strength and its skill in project execution. The combined company now had the size and wherewithal to think big in terms of scale and risks. Actually, very big. And scale was the way to bring costs down—much bigger ships, much bigger liquefaction trains, and much bigger turbines. Projects were managed with great discipline, capturing the learning and bringing down the costs of subsequent projects. One way to do that was by making facilities as standard as possible, doing the design very carefully, and then sticking to it. As one of the senior managers put it, “The rule was no change orders.”
Hungry at the time for work, Korean shipyards tendered for much bigger LNG carriers—two times the size of those then afloat—at a very attractive price. RasGas accepted the bids. Higher volumes meant lower costs. Now, as they put it, Europe was “reachable.” The joint venture knew that it could compete against pipeline gas in Europe, and even beyond Europe. For with sufficient scale (and bolstered by the liquids with the gas) Qatar could deliver competitively priced gas anywhere in the world.
By 2002 Qatar had emerged as a potent new competitor in the global gas market. It could dispatch large amounts of LNG into any major market—Asia, Europe, and the United States. Breaking with the traditional business, it could also do so without necessarily being tied to a long-term contract. It built its own receiving terminal, in Europe. Qatar was at the forefront in creating a new business model in which both buyers and sellers were willing to buy or sell LNG without complete reliance on long-term contracts. And the numbers are huge: By 2007 Qatar had leapfrogged over Indonesia and Malaysia to become the world’s number one supplier of LNG, and this small emirate of 1.5 million people was on its way to being able to provide almost a third of the world’s LNG supply.
It was not just the physical resources and technical capabilities that projected Qatar into this premier position. It was also the result of what those on the other side of the negotiating table recognized to be efficient and determined decision making. Qatar could be very tough, but it was also intent on closing deals and getting things decided quickly, not in multiple years. As Minister Al-Attiyah put it, “If we do a deal one day, we don’t wait, we sign it the next day.” Reliability was one of the critical pillars on which the Qatari industry was built. Once a deal was done, stability of contracts underpinned confidence and facilitated investment. The importance of this approach was made clear by comparison to the other side of the median line, off the coast of Qatar, where Iran after forty years has yet to be able to turn South Pars gas into exports.13
By the 2000s, it seemed that natural gas, carried around the world on tankers, was on its way to becoming a truly global industry. Historically, due to the high cost of transporting gas over long distances, natural gas has been traded regionally. By bringing down costs so significantly, this no longer applied.
What this meant was vividly demonstrated in July 2007. On July 16, 2007, a large earthquake hit central Japan, damaging