Revenues from Qatar’s LNG fields will provide budget surpluses until the 2030s, Fitch said.

Revenues from Qatar’s liquified natural gas (LNG) fields will ensure that the country posts budget surpluses until the 2030s, Fitch said in a release on Wednesday outlining the rating rationale.

The upgrade from AA- “reflects Fitch’s greater confidence that debt to GDP will remain in line with or below the ‘AA’ peer median after falling sharply in recent years,” the agency said.

Fitch expects Qatar’s debt-to-GDP ratio to fall to about 47 percent of gross domestic product (GDP) in 2024 and 45 percent in 2025, from a peak of 85 percent in 2020.

Qatar is already one of the richest countries in the world and boasts one of the highest ratios of GDP per capita. The added revenue boost will ensure that its external balance sheet will strengthen from an already strong level, Fitch said.

However, Fitch warned that the continuing war in Gaza posed a risk to Qatar’s rating even though it had so far not been directly affected. Should a sharp escalation in regional tensions lead to capital flight from banks, for instance, or cause prolonged disruptions of Qatar’s hydrocarbon and transport sectors, that would affect the latest rating, Fitch said.

Qatar is one of the biggest exporters of LNG along with the United States, Australia and Russia. Asian countries led by China, Japan and South Korea have been the main market for Qatari gas, but demand has also grown from European countries since Russia’s war on Ukraine threw supplies into doubt.

Qatar Energy plans to expand LNG production capacity at North Field from 77 million tonnes per year (mtpa) to 110 mtpa by end-2025, 126 mtpa by end-2027 and announced a further expansion to 142 mtpa by end-2030.

The North Field is part of the world’s largest gas field, which Qatar shares with Iran, which calls its share South Pars.

Competition for LNG has ramped up since the start of the war in Ukraine, with Europe, in particular, requiring a large quantity to help replace Russian pipeline gas that used to make up almost 40 percent of the continent’s imports.

However, after a decade of meteoric price rise, gas prices dropped earlier this year to nearly all-time lows after adjusting for inflation. Despite that drop, all leading gas producers, including the US, Australia and Russia, want to increase output betting on further demand growth.