Qatar signals LNG price war for market share in Asia
SINGAPORE (Reuters) – Qatar’s plan to increase LNG production to 30 percent is the start of a price war for customers in Asia that attack the Gulf state against US competitors , Russia and Australia.
Qatar, facing regional isolation in a diplomatic conflict with its Gulf neighbors, took the energy markets by surprise on Tuesday, when it was said it would increase its LNG production to 100 million tonnes per year – equivalent to a third of global supplies Current – in the next five and seven years of age.
He suggested that the rich kingdom is preparing for a long battle against Saudi Arabia, Egypt, the United Arab Emirates and Bahrain, which will meet Wednesday to decide whether to continue the sanctions they imposed in Qatar on allegations that supported terrorism and rival Regional courts wooed Iran.
The measure will add Qatar’s gas to a market already saturated in a challenge slightly disguised to other exporters who also increase their production.
With low production costs and existing infrastructure, Qatar is well positioned to move forward, analysts say. The flood of more LNG market help defend its place as the world’s largest exporter, a position contested by Australia.
“Qatar is losing market share, so it could be becoming the number one new in LNG,” said Neil Beveridge, an oil and gas analyst at research and brokerage firm Sanford C. Bernstein.
Focus on Asia
LNG is a super-cooled natural gas that is transported by tankers around the world.
For a long time a niche product, it has become an appreciated industry because natural gas is a cleaner fuel than fossil or coal oil, and is also very versatile, with potential uses ranging from power generation to heating and Fuel transport.
For an interactive chart in Qatar, click tmsnrt.rs/2sinDGg
Large US and European oil companies such as Royal Dutch Shell and Chevron have invested heavily in the last decade – often more than they spent on oil – in order to dominate the LNG market, including megaprojects such as Gorgon in Australia Chevron or prelude Of Shell.
The main battlefield for the LNG market is Asia, which consumes 70 percent of the fuel and where it is considered a key fuel to meet the growing demand for energy without sliding pollution from coal.
The largest buyers of LNG in the world are utilities, in particular Japan and South Korea.
The sources of these services said they were surprised by the Qatar movement.
“We must determine why Qatar plans to increase its production … We have not yet planned to import new LNG shipments into Qatar,” said Kim Young-ki, a spokeswoman for Korea Gas Corp. (KOGAS) One of the largest LNG buyers in the world.
Increase in production
Qatar’s announcement came a day after Iran signed its first deal with French automaker Total Nacional and China, which produce gas in an area it shares with Qatar.
Beveridge of Sanford C. Bernstein said Qatari’s move to increase production “could be a response to the full restart of development work” on the Iranian side of gas reserves.
In order to consolidate its own market share, Russia’s Gazprom, the world’s largest natural gas producer, said on Tuesday it would start pumping gas to China through a new gas pipeline in late 2019 earlier than expected ….