Fitch Ratings has bestowed upon Qatar its third-highest rating, AA, attributing the upgrade to the anticipated revenues stemming from the nation's expanded gas fields, the agency confirmed in a recent announcement.

The bolstered revenues from Qatar's liquefied natural gas (LNG) fields are poised to fortify the country's fiscal position, ensuring the generation of budget surpluses until the 2030s, according to Fitch's statement released on Wednesday, elucidating the rationale behind the rating alteration.

The agency's decision to raise Qatar's rating from AA- underscores Fitch's augmented confidence in the country's ability to sustain a debt-to-GDP ratio that aligns with or falls below the 'AA' peer median, following a marked decline in recent years, as outlined by the agency.

Fitch anticipates Qatar's debt-to-GDP ratio to dwindle to approximately 47 percent of the gross domestic product (GDP) in 2024 and further decrease to 45 percent in 2025, down from a peak of 85 percent recorded in 2020.

Qatar, renowned as one of the wealthiest nations globally with a notably high GDP per capita ratio, is poised to witness a supplementary revenue surge, thereby reinforcing its already robust external balance sheet, Fitch noted.

Qatar stands as a key player in the global LNG market, alongside major exporters such as the United States, Australia, and Russia. While Asian nations, including China, Japan, and South Korea, traditionally constitute the primary market for Qatari gas, escalating demand from European countries.

In line with its expansion plans, Qatar Energy is slated to increase LNG production capacity at the North Field from 77 million tonnes per year (mtpa) to 110 mtpa by the conclusion of 2025, subsequently aiming for 126 mtpa by the conclusion of 2027, with further expansion to 142 mtpa projected by the end of 2030.

The North Field, a component of the world's largest gas field, shared with Iran under the name South Pars, has assumed greater significance amidst heightened competition for LNG supplies, particularly in Europe. The continent, reeling from the need to offset the shortfall in Russian pipeline gas, is actively seeking alternatives, driving up demand for LNG. Despite recent price fluctuations, major gas producers remain steadfast in their efforts to bolster output, banking on sustained demand growth in the foreseeable future.

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