Spain deepens economic ties with gas-rich Qatar

MADRID — Spain and Qatar deepened their economic ties on Wednesday during a visit by Sheikh Tamim Bin Hamad Al Thani as Madrid seeks to diversify its gas supplies following Russia's invasion of Ukraine.

During the two-day visit, the Qatari emir's first since he took power in 2013, the two countries signed 12 agreements on matters relating to business and the economy, education, science and health, a Spanish government statement said, without giving further details.

And Qatar agreed to increase its investment in Spain by another $5 billion "in the coming years," Spanish Prime Minister Pedro Sanchez said.

Neither side gave a timetable for the investment, nor did they specify which sectors would benefit.

Previously, Qatari funding has been invested in several sectors: civil aviation, construction, energy and communications.

One agreement between Qatar's QIA sovereign wealth fund and the state-run Spanish Development Financing Company (COFIDES) would seek "to identify investment opportunities" in line with Spain's plans for its EU COVID recovery funds, namely making its economy greener and more digitalised, it said.

Sanchez hailed the increased investment as “a gesture of confidence in the Spanish economy and Spanish businesses which will strengthen bilateral ties”.

Before the pandemic, Qatari investment in Spain stood at 2.67 billion euros ($2.8 billion) in 2019, the Spanish government said, making it the country’s 24th biggest investor.

But with Wednesday’s announcement, Qatar has agreed to almost triple that figure.

Increased gas imports? 

“In the current international context of the conflict in Ukraine, this new bilateral and strategic agreement strengthens Qatar’s significance for Spain, meeting not only investment criteria but also that of energy security,” the government statement said.

Qatar, one of the world’s three biggest exporters of liquefied natural gas (LNG), is currently Spain’s fifth-largest supplier after the United States, Algeria, Nigeria and Egypt.

The country accounted for 4.4 per cent of Spain’s total gas imports in April and the Spanish government hopes to increase this share as Madrid seeks to diversify its gas supplies following Russia’s invasion of Ukraine.

“We are working closely with our European counterparts to continue discussions about liquefied natural gas supply agreements in the long-term,” Abdullah Al Hamar, Qatar’s ambassador to Spain, told the Spanish daily 20minutes on Tuesday.

European states are increasingly looking to other sources of natural gas as they try to wean themselves off dependence on Russia, with LNG easily shipped by boat from countries such as Qatar and the United States.

After Madrid, the Qatari leader will continue his tour of Europe, visiting Germany, Britain, Slovenia and Switzerland, where he will attend the World Economic Forum in the mountain resort of Davos which runs from May 22-26.

Qatar will host the World Cup later this year.