SAWT BEIRUT INTERNATIONAL

| 28 September 2022, Wednesday |

Qatar can’t help Europe much if Russian gas is interrupted

According to three people familiar with the issue, Qatar would be unable to considerably increase natural gas supply to Europe if Russian imports were disrupted.

The administration of US President Joe Biden has communicated with key gas producers, notably Qatar, about the prospect of increasing exports to Europe in the event of a Russian invasion of Ukraine. Russia’s President Vladimir Putin has denied having any intentions for an invasion on several occasions.

Qatar, one of the world’s largest exporters of liquefied natural gas, is already at maximum capacity, and the majority of its cargoes are delivered to Asia under long-term contracts that it cannot breach, according to the individuals.

According to them, the Gulf state does not want to jeopardize its Asian alliances, even if doing so might yield political benefits in Europe and the United States.

Two top Biden administration officials said Tuesday that the US is prepared to ensure that alternative supply cover a considerable portion of any possible gas shortage. According to authorities, rerouting supplies might take anywhere from a few days to a week or two.

According to a National Security Council spokesman, the US is considering a variety of contingency plans and is in discussions with numerous allies and corporations throughout the world.

On Monday, Secretary of State Antony Blinken talked with his Qatari colleague, Mohammed bin Abdulrahman Al-Thani. According to the US State Department, they “addressed Russia’s unwarranted military buildup along Ukraine’s borders.”

State-controlled Qatar Energy sells some LNG on the spot market, with the majority of it going to Europe. However, the amounts would be too modest to make a significant influence, according to the individuals.

Qatar was able to shift some cargoes from Europe to Asia in 2011 as LNG prices skyrocketed following Japan’s decision to shut down its nuclear power plants in the aftermath of the Fukushima tragedy. These changes were made with the permission of Qatar’s European clients.

Europe’s become a more attractive market for spot LNG suppliers since prices there reached records last month. Yet Qatar has only shipped six cargoes to northwest Europe, the region’s biggest market, since mid-December, according to ship-tracking data compiled by Bloomberg. Over the same period, the US delivered 42 shipments.

Maxed out

Qatar’s energy minister, Saad Al-Kaabi, said in October the country was unable to pump more gas to help bring down prices, which have soared in the past year as the global economy rebounds from the coronavirus pandemic.

“We are maxed out,” Al-Kaabi said at the time, adding that Qatar’s LNG exports were around 80 million tons a year. “We’re producing what we can.”

Decisions on whether to ship gas to Europe or Asia are made primarily on “market factors,” he added.

Qatar is spending over $30 billion to raise its output capacity by half, but the project is not projected to produce its first gas until the end of 2025.

    Source:
  • alarabiya