Riyadh is said to want to build a new industrial and economic hub and excavate a waterway along Qatar’s sole land border, allowing shipping to bypass the emirate.
News of the plan has prompted fears that Qatar, which has large natural reserves of oil and gas, could be cut off and effectively turned into an island.
Qatar is at the centre of a crisis that has been deepening since June, after neighbouring countries cut off diplomatic, trade and travel ties with it and imposed a land, air and sea blockade.
The Qatar-owned Al-Araby news website said: “The canal project would appear to be an attempt to further tighten the blockade on Qatar and attempt to take trade away from the emirate.”
Near-identical reports about the canal scheme appeared in two state-linked Saudi newspapers - Sabq and al-Riyadh - on Monday. An earlier report by Sabq online said the canal project would "turn Qatar into an island" and take just 12 months to complete.
They claimed the scheme would turn the area into a “unique” industrial and economic hub with a number of ports lining the waterway.
The planned new canal, under the authority of Riyadh, would be 37 miles long and 210 yards wide, allowing ships to navigate it, the Saudi news site Sabq online reported.
The site said the planned military base would be built on a 1km stretch of land that separates Qatar’s border from the Salwa water channel.
The rest of the area would be converted into a waste dump for a planned Saudi nuclear reactor.
The project, which also includes new hotel resorts with private beaches, would be financed by the private sector and Saudi and United Arab Emirates investors. The proposal has not received official approval and would face many obstacles before it could be enacted in practice.
Egyptian companies with experience in digging the Suez Canal would create the new Salwa Marine Canal, Sabq reported.
Saudi border guards would be posted to the area, replacing passports and customs offices from the Salwa border crossing between the two countries.
Sceptics said the area for development was chosen deliberately to isolate Qatar.
But Sabq online said: “Geostrategic experts said that, once the project is carried out, Qatar will not be an independent island as it will be part of Salwa Island where Saudi Arabia will share the island with it through its military base.”
Qatar has accused its larger neighbour of bullying both it and Lebanon.
Saudi Arabian and Qatari government spokespeople did not respond to requests for comment.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies