Minister of State for Energy Affairs H E Eng. Saad bin Sherida Al Kaabi addressing the press conference held on the sidelines of the 6th Summit of the Gas Exporting Countries Forum (GECF). Pic: Mohamed Farag
Doha: The steep rise in the natural gas prices in the global markets are caused by the lack of investment and not due to Russian-Ukrainian crisis, said Minister of State for Energy Affairs H E Eng. Saad bin Sherida Al Kaabi. He said Qatar wants to meet European Union (EU) demands for additional LNG supplies, but most of its exports are already tied to long-term contracts.
“Everything that is going on today on pricing is fundamentally because of lack investments and that will take time to catch up. Supply demand has a tendency to correct itself over time so hopefully this will be corrected, it will take time,” said Minister Al Kaabi addressing the press conference held on the sidelines of the 6th Summit of the Gas Exporting Countries Forum (GECF).
Minister of Petroleum and Mineral Resources of the Arab Republic of Egypt H E Tarek El Molla, and Secretary-General of the Gas Exporting Countries Forum (GECF) Mohamed Hamel also attended the press conference.,
Minister Al Kaabi said that no single country can replace gas supplies by Russia. He said that most of the Qatar’s LNG is already tied up in the long term contracts.
“Russia provides I think 30-40 percent of the supply to Europe. There is no single country that can replace that kind of volume, there isn’t the capacity to do that from LNG,” he said. “Most of the LNG is tied to long-term contracts and destinations that are very clear. So, to replace that sum of volume that quickly is almost impossible,” he said.
Minister Al Kaabi said that for Qatar the amount of divertable contracts that can be shipped to Europe is only 10-15 percent. “It’s not that something is not contracted, the question is, is it divertible or not? And the majority is tied up to long term contracts. The divertible volume is probably 10-15 percent,” he said.
The Minister said that Qatar has always proven that it is a reliable country when it comes to delivery of gas. There are many European countries that have contacted Qatar to supply gas, stressing that Qatar is well-known for respecting its contracts.
QatarEnergy is moving forward with full force to develop the North Field by building the latest LNG production lines, which will push our leading position forward with a production capacity of 126 million tons per year in 2027.
Replying to a question about Russian-Ukrainian crisis, the Minister said that that the forum did not discuss the developments in Ukraine, because it is not a political forum and has nothing to do with political issues.
Al Kaabi said that Qatar wants to meet EU demands for additional LNG supplies, but most of its exports are already tied to long-term contracts. He said: “Qatar is very clear about the sanctity of contracts. We are known for being tough and abiding by contracts in good times and bad.”
The Minister of State noted the desire to help the European Union by providing additional quantities within the limits of the available quantities of existing gas, adding: “We will help, but most of our LNG is tied to long-term contracts. I spoke with the European Union Commissioner for Energy a few weeks ago about more supplies.”
“There have been talks during the past weeks, and we are ready to supply gas as much as we can to any party. We want to respect our commitments as well, and we can help in this area and we are known to help our friends when they need us,” he noted.
Replying to a question about financing the expansion of the North Field from abroad and issuing bonds, Minister Al Kaabi said: “We previously mentioned that we will not go to the financial markets because our financial situation is excellent and there was no intention to go to the financial markets for financing, but we resorted to that when we saw a significant decline in interest rates, which was tempting. We got $12.5bn at very low prices for 30 and 20 years and that was tempting. It was better for us to take the loan at that time to develop the North Field and we took advantage of the low prices; and there is no intention to issue other bonds for the North Field development project because we took what we wanted. If there are additional projects, we will think about them at the time.”
