Military Review

Qatari gas will not beat off either Russia or Asia from Russia

26
Last Friday, Reuters published a story titled “Qatar Reduces LNG Prices for Asian Customers” (the English version is somewhat more detailed). The material is very interesting in terms of the volume of traditionally inaccessible data on contract terms. As for the thesis submitted in the title, it is not all that simple. Considering the importance of the topic for our country, we suggest talking about it.
Qatari gas will not beat off either Russia or Asia from Russia



History questions [/ b]

For several years now, we have been frightened that Qatar will overwhelm Europe with cheap LNG. Every year it became more difficult to speculate on this. The emirate transferred its supplies to Asia, and almost did not enter into new European contracts, and if it did, it was at such prices that it was possible to buy one and a half times more gas from that amount from Gazprom; exactly such terms contracts for future LNG supplies to Poland.

But now Russia intends to actively enter the Asian LNG market. And if so, then our country needs to be intimidated with “cheap Qatari gas” not in Europe, but in Asia. And this is not just psychological pressure. The moment is very important now - there is a negotiation process on concluding long-term contracts (Gazprom Vladivostok LNG, Rosneft plant on Sakhalin, Novatek Yamal LNG), and the general information background, of course, affects the negotiations. From a formal point of view, Qatar really reduces prices in the Asian market. But this is connected with the transition from spot sales to long-term contracts. And here we are not talking about any dumping.

Let us briefly recall the history of the issue. Qatari plants were prepared for the American market. It is for this reason, by the way, that the main fleet of Qatar gas carriers is supertankers, which after that no one else began to build. But for long distance transport — from the Middle East to the USA — they seemed like a good way to save on transportation costs.

We all know what happened afterwards - because of shale mining in the United States, Qatari gas was not needed there. Therefore, LNG began to be redirected to Europe, to the spot market. And then there's the crisis. As a result, prices briefly collapsed to 40 dollars per thousand cubic meters, which did not even cover the cost of liquefaction and transportation. But with the help of this figure, for several more years we will be frightened by cheap LNG from Qatar.

But Qatar was not discouraged. And he gradually began to get good profits, redirecting LNG to Asia, having achieved good success here. Data for the current year is not yet, but I think the picture will be even more indicative.


And in Europe, spot gas prices began to straighten. Now, on average, prices in Europe are 10 dollars per million BTUs, in Asia, 15 dollars and above. The question arises: why did the emirate initially prefer to leave part of the gas in Europe, because in Asia LNG has been more expensive in recent years?

Someone prefers to explain this by conspiracy - the fact that Qatar is largely controlled by the British, the factories are partly owned by foreigners, etc., etc. Indeed, the UK is the main market for Qatari gas in Europe. But judging by the way Doha ignores the requests of the British to sell them some more LNG (we will return to this later), this version hardly looks plausible.

Most likely, the reasons are different. LNG volumes, which the United States actually abandoned, were dumped onto the spot market - Asian or European. And if Qatar transferred all supplies to Asia at once, the spot market would collapse. Therefore, Qatar balanced supplies between the European and Asian markets in order to get the maximum profit. And now, in the wake of growing demand in the Asia-Pacific Region, the bulk of gas is finally relocated to Asia.

In addition, there was another reason. Older Asian LNG receiving terminals often could not accept supertankers. As a result, Qatar had to charter "foreign" gas carriers to ensure the transportation of LNG to profitable Asian destinations, or, using its fleet (which is cheaper), to send LNG to Europe. Now, after the modernization of the old terminals (in Japan) and the emergence of new (in China), this problem has been largely resolved.

[b] Long-term contracts: no dumping

Anyway, now comes a new stage. Many new producers are entering the Asian market (Russia, Australia, etc.) who cannot afford to sell all their gas on the spot market. Therefore, they will all tie their deliveries to long-term contracts. And Qatar is in a hurry to complete its “games” with the spot market by selling free volumes of LNG under long-term contracts.

All Qatari liquefaction capacity is now 77 million tons. Contracts - 61 million tons. Remains 16 million tons - not so much. And what about prices?

Reuters is right here. Qatar will get less. Selling on the spot market is a riskier strategy, but in some cases, especially when there is a shortage of gas, this approach allows you to make a decent profit.

But if you compare the proposals of Qatar at the conclusion of long-term contracts with the overall picture of the market, it is clear that Doha is trying to knock out the maximum prices. And there is no question of any dumping.

To understand what's the matter, you will have to sort out a bit the pricing formula for contracts for the supply of LNG in Asia.

LNG price (US $ per million BTU) = Oil price (US $ per barrel) * K + b

Where K and b are coefficients, and it is for them that the main trades go when signing contracts. The main factor, of course, K - it actually reflects the relationship between oil and gas prices. b plays a smaller role, usually a small value (for example, 0,5 dollars per million Btu, and this is a fixed “additive” to the base price.)

Suppose that b = 0. Then, if K = 0,15, it means that at the price of oil in 100 dollars per barrel, the price of LNG will be 15 dollars per million BTU. Approximately such prices are now observed.

And one more important point. K = 0,17 reflects energy parity with the price of oil, and therefore usually this coefficient is not higher than 0,17, but rather a bit lower. Still, gas, even LNG, has a discount to the price of oil. Yes, and b adds something to the final price.

And now the data from the Reuters message: Qatar offers buyers to enter into long-term contracts with the coefficient 0,146 – 0,147. Australia, where LNG is very expensive to produce, has entered into contracts with the 0,145 coefficient. With the price of oil in 105 dollars per barrel, as it is now, LNG in this case will cost 15,2 dollars per million BTU, even without taking into account the fixed additive (b). This is exactly at the level of current spot prices in Asia, although they sometimes increase to 17 dollars per million BTUs.

The material also contains data on the Russian contract between CNPC and Yamal LNG. K is small, total 0,122, but the fixed coefficient b is very high (the exact value is not specified).

But back to our topic. Of course, Qatar puts such prices not out of solidarity with Russia and other exporters. But whatever the reasons, the strategy itself is obvious - Qatar sells its LNG expensive and very expensive. All his sales combinations pursue one goal - maximizing profits, and not a hypothetical market seizure by dumping. By the way, the Reuters note itself was written fairly objectively, but the title may well leave the wrong impression. Therefore, it seems that it was important to disassemble this plot.

What will remain the UK?

Consider another question. To what extent can gas flow from Europe to Asia continue? The answer to this question is not as obvious as it may seem. It is clear that almost all free volumes will go there (more precisely, they have already left). And, by the way, after the conclusion of long-term contracts, they will not return back, even if the price of LNG in Europe rises.

And what about long-term European treaties? It is striking that by the end of last year, less gas was supplied to Europe than it corresponds to long-term contracts (see table and graph). With what it can be connected? The main reason is that the seemingly guaranteed European supplies can be redirected to Asia. When is it possible, and who is the beneficiary of such combinations?

First, you should pay attention - who is the importer of gas. Often it is a global company (even with a European registration) or a gas trader. Then such an importer can redirect gas to more lucrative markets (of course, if the importer has no obligations on these supplies in the market of the country of initial destination). But here, two options are possible. First, LNG can be delivered by Qatar to its destination, or the inability to change this item is spelled out in contracts. Then for re-export to Asia, LNG has to be reloaded in Europe to other vessels. But even such a costly option often turned out to be profitable. It is even more profitable if the importer himself takes the goods in Qatar and takes him wherever he wants, at his discretion.

Such situations have occurred in recent years, and all this time Qatar sadly watched how other companies receive additional profits, in fact, reselling its gas. Therefore, Doha and refused to enter into new contracts with the EU. Still: on the one hand, Europe insists on pricing with reference to European exchanges, and then resets the fuel to Asia, where the price linkage is oil. Poland agreed to the oil linkage - and, please, guaranteed deliveries without problems. Although expensive.

We can not say about the UK. This country is the main importer of Qatari gas to the EU. From 20, with a little million tons of last year’s imports, over 10 million went to the island. Conversely, it is Qatari supplies that make up the bulk of all British imports of liquefied gas. The main part of LNG is under contract 2009 of the year (see table), and, apparently, importers have long-term obligations to deliver at least part of this gas exclusively to the British market.

But the country, as is known, has been experiencing a gas shortage in recent years, and therefore is trying to conclude additional contracts. Qatar stubbornly refuses, limiting itself to the 3 – 4-year agreements.

In particular, in 2011, the British Centrica agreed to supply 2,4 million tonnes per year of Qatari LNG for three years. And most recently expiring in the middle of next year, the contract was extended to 4,5, and expanded to 3 million tons per year. By the way, Centrica is one of the importers who are really interested in receiving cargo at the planned destination, as its main business is gas supply for British consumers (it operates under the British Gas brand on the market).

But we did not include this contract in the list of European contracts, and here's why. Qatar reserves the right to deploy this LNG to Asian markets (albeit by paying a small penalty). As a result, under the 2011 contract, Centrica received only about half of the planned supply volume. Recently, Qatar has concluded several smaller contracts with European consumers under the same conditions.

One way or another, amid LNG shortages, the UK has been receiving 10 million tons of Qatari gas from 77 million tons of total Qatari liquefaction plants in recent years. And maybe this year will be even less. To date, the island has arrived at 38% less gas carriers than in the same period last year. So the talk of British influence on Qatar’s policy appears to be "greatly exaggerated."
Author:
Originator:
http://www.odnako.org/blogs/show_32121/
26 comments
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  1. Sirs
    Sirs 14 November 2013 07: 19
    +1
    So this is what - Russia will put pressure on gas so that gas is in Asia - and that’s good, the prospects are huge.
    1. APES
      APES 14 November 2013 09: 18
      +3
      Quote: Sirs
      and that's good, the prospects are gigantic


      The commodity economy has only one prospect .......
      1. Ezhaak
        Ezhaak 14 November 2013 13: 55
        0
        Quote: APES
        The commodity economy has only one prospect.

        Following your words, Saudi Arabia should have crumbled into sand for a long time
        But nothing like this happens.
        The basis of the economy of Saudi Arabia is oil exports.
        GDP (nominal) $ 369,179 billion (2009)
        PPP GDP of $ 371,5 billion (2006)
        Place by GDP by PPP by volume: 30th
        per capita: 73rd
        GDP growth of 4,3% (2006)
        PPP per capita GDP of $ 23 (300)
        GDP by sector of agriculture: 3%
        industry: 63,6%
        services: 33,4% (2006)
        Inflation (CPI) 5.10% (2009)
        Human Development Index (HDI) 76th place (2006)
        Economically active population 43,57 million
        Employed population by sector of agriculture: 12%
        industry: 25%
        services: 63% (1999)
        Unemployment Rate 11.60% (2009)
        International trade
        Export of $ 207,8 billion (2006)
        Oil products export items (90%)
        US Export Partners, Japan
        Import $ 64,16 billion (2006)
        The country can be said to even thrive in places. And this is happening, probably because there are no lovers of shitting on their country, foreshadowing its inevitable death.
        1. goldfinger
          goldfinger 14 November 2013 14: 27
          0
          Quote: Hedgehog
          The country can be said to even thrive in places.

          From Minsk. Don't think everyone is a fool, I can poke around from Vicki too. They forgot to indicate the population (29 million), the level of oil and gas production comparable to that of Russia, what kind of stealing is being cut. Climate costs are almost zero (air conditioning only). And other. And most importantly, they don’t hide money for raw materials in offshores, but invest in the development of their country. Feel the difference. I will not "rub salt on my wounds" by quoting figures on your corruption.
          1. Ezhaak
            Ezhaak 14 November 2013 14: 34
            -3
            Quote: goldfinger
            I will not "sprinkle salt on my wounds"

            And at the same time learn to read to the end!
            1. goldfinger
              goldfinger 14 November 2013 15: 14
              0
              I read and did not understand what figures you brought. It doesn’t dance. If the Saudi - where did they get so much labor. population - 43,57 million. If they are with foreigners in total for 2012. - 26 people, (Wiki, CIA). If the Russian data is also not the topic. You already decide on this vinaigrette.
              Quote: Hedgehog
              And at the same time learn to read to the end!
              1. Ezhaak
                Ezhaak 14 November 2013 15: 49
                -1
                Quote: goldfinger
                I read and did not understand what figures you brought.

                All questions to the author of the article on the Wiki. http://ru.wikipedia.org/wiki/%DD%EA%EE%ED%EE%EC%E8%EA%E0_%D1%E0%F3%E4%EE%E2%F1%E
                A%EE%E9_%C0%F0%E0%E2%E8%E8
        2. Gluxar_
          Gluxar_ 14 November 2013 19: 30
          0
          Quote: Hedgehog
          The country can be said to even thrive in places. And this is happening, probably because there are no lovers of shitting on their country, foreshadowing its inevitable death.

          And this despite what means the SA spends on all sorts of Wahhabis / Salafists.
          1. Ezhaak
            Ezhaak 14 November 2013 19: 40
            0
            Yes, it is rightly noticed. But My goal was simply to show that not every supplier of raw materials lives poorly. Saudi Arabia is not the last country from this list, I kept silent about many. I just gave an example of the fact that you can live with raw materials. But Russia is simply obliged to engage in specific production and high technologies. Otherwise, we will not see good luck!
            1. Gluxar_
              Gluxar_ 14 November 2013 19: 52
              0
              Quote: Hedgehog
              Yes, it is rightly noticed. But My goal was simply to show that not every supplier of raw materials lives poorly. Saudi Arabia is not the last country from this list, I kept silent about many. I just gave an example of the fact that you can live with raw materials. But Russia is simply obliged to engage in specific production and high technologies. Otherwise, we will not see good luck!

              I don’t understand what is the difference? Only with common sense. Having something useful is always better than not having. And since the minerals are called "minerals", then everyone wants to own them. Not only the oil and gas sector is developing in Russia; moreover, Russia has all types of production. Russia cannot be compared with either the SA or Germany. Even the USA is not a competitor. Russia is a self-sufficient civilization, just like the West as a whole. In addition to large incomes, Russia also has huge expenses, both on the Armed Forces and on science and other items.
              Western countries share many items of expenditure and even under such conditions are forced to constantly borrow money to stay afloat. All the well-being of the West rests on its debts, that is, it "steals" someone else's well-being, leaving "its debt" to the owner.
              On the other hand, Russia, on the other hand, not only assumes all costs, but also supports neighboring states of "its habitat", without receiving a synergistic effect from structurally sound economic cooperation. With the creation of the CU and the future of the EU with Ukraine, the volume of the internal market will be sufficient to create competitive production capacities in any segment of the economy. That is why the political elite of Ukraine is bribed in every possible way, I think the West will even be ready to give Ukraine that very 200 billion euros, just to prevent Moscow from finishing its party on time.
              Qatar in this context is one of the figures that has already played its own.
              1. Ezhaak
                Ezhaak 14 November 2013 20: 08
                0
                In our country, crowds of people are ready to yell that in Russia nothing is extracted except raw materials. Here from here all the talk and went here. All. Left before tomorrow. Happily.
      2. Gluxar_
        Gluxar_ 14 November 2013 19: 29
        0
        Quote: APES
        The commodity economy has only one prospect .......

        In the face of a sharp decline in mineral reserves on the planet, the prospect of becoming the basis of the welfare of the people who own these wealth is obvious.
        And in addition to raw materials, Russia has a dozen sectors of the economy that are developing only a little slower than raw materials.
    2. Gluxar_
      Gluxar_ 14 November 2013 19: 26
      0
      Quote: Sirs
      So this is what - Russia will put pressure on gas so that gas is in Asia - and that’s good, the prospects are huge.

      The prospects will become even better when in the end it comes to Europe that it flies to * opu.
  2. Ihrek
    Ihrek 14 November 2013 07: 19
    0
    Qatar is opposed to Syria precisely because of natural gas. Syria does not allow it to lay a pipe through its territory further to Europe. If allowed, then some of the customers in Russia will lose unambiguously, if not most.
    1. APES
      APES 14 November 2013 09: 23
      +1
      Quote: Jamal
      Qatar is specifically opposed to Syria


      office with a "big" name Qatar can be closed within one day by a call from Canary Wharf
      1. major071
        major071 14 November 2013 09: 53
        +4
        This office can be closed with one rocket in a gas pocket. laughing
        1. alone
          alone 14 November 2013 19: 24
          0
          some just rocket rockets for no reason)))
    2. goldfinger
      goldfinger 14 November 2013 20: 23
      0
      Quote: Jamal
      If allowed, then some of the customers in Russia will lose unambiguously, if not most.

      to the very POINT. IF PEACE COMES IN SYRIA - "PIPE" TO GAZPROM. AND THIS IS FANTASTIC. PUTIN IS AFRAID TO THINK ABOUT THIS. IF ASSAD breaks up the rebels, GAS WILL GO TO EUROPE FROM IRAN. IF THE REBELS WIN, QATAR GAS WILL COME. STALEMATE SITUATION. THAT IS GAZPROM NEEDS A PERMANENT CIVIL WAR IN SYRIA.
  3. ZU-23
    ZU-23 14 November 2013 08: 14
    0
    Qatar pounds prices, the frayer's greed will destroy, they live with the Americans and Anglo in their world where there is a lot of printed money)))
    1. APES
      APES 14 November 2013 09: 25
      +3
      Quote: ZU-23
      they live with americos and anglo in their world


      only it is time for Russia to stop rushing into this "fabulous" world - it is necessary to build its own
      1. Gluxar_
        Gluxar_ 14 November 2013 19: 38
        0
        Quote: APES
        only it is time for Russia to stop rushing into this "fabulous" world - it is necessary to build its own

        Russia has never been torn and is not torn.
    2. Gluxar_
      Gluxar_ 14 November 2013 19: 38
      0
      Quote: ZU-23
      Qatar pounds prices, the frayer's greed will destroy, they live with the Americans and Anglo in their world where there is a lot of printed money)))

      Qatar as the SA does not beat prices out of greed. Qatar has invested in its gas sector up to the tonsils. He built a fleet of gas carriers and LNG terpinal. And he built everything with credit money. Now it is vital for him to recapture his investments. But as luck would have it, the financial crisis hit, and Iran decided to lay a pipe through Syria to Europe. Russia has built its pipelines bypassing Europe.
      Anglo-Saxons degenerate, with the help of Qatar they wanted to turn the trick from the SA and the USSR, but the second time did not work. Super dumping for a couple of years only led to an increase in costs and a drawdown on loans, because today the skilled punks realized that it’s enough to play the fool and is trying to get out of the hole into which they drove themselves.
  4. ed65b
    ed65b 14 November 2013 09: 19
    +2
    No wonder our "dreams come true" silently chuckle into a mustache.
    1. kafa
      kafa 14 November 2013 11: 24
      -1
      I’m afraid that, upon close inspection, this mustache does not turn into pubic hair repeat
  5. itr
    itr 14 November 2013 11: 43
    +1
    Soap bubble !!!! There is no cheaper natural gas than fuel! The only thing is due to what such a low price ?????
    1. Ezhaak
      Ezhaak 14 November 2013 14: 06
      0
      Quote: itr
      What is the only reason why such a low price?

      It is often associated gas in oil production. Most likely the reason lies in this.
    2. max702
      max702 14 November 2013 14: 37
      0
      The United States subsidizes the production and sale of gas to Qatar, just like many countries support their rural households, and the United States has a lot of green papers .. it has its own station and it works without interruptions.
    3. Gluxar_
      Gluxar_ 14 November 2013 19: 40
      0
      Quote: itr
      Soap bubble !!!! There is no cheaper natural gas than fuel! The only thing is due to what such a low price ?????

      At the expense of Qatar, of course. A failure in the development strategy led to a drawdown in the sales program, it is difficult to stop the extraction of gas from the well, concrete needs to be poured. So they sold for how much they took, someone warmed his hands well in this matter. And Qatar is stuck in war and credit.
  6. Alexandr0id
    Alexandr0id 14 November 2013 13: 52
    +4
    I do not share your hatred of Qatar. if people know how to build a normal business, then this is worthy of respect.
    flew their airlines, more than satisfied. any of our airlines is a shame and a disgrace. the Indonesian Garuda and Indian Indigo on domestic flights have newer and cleaner aircraft. and Qatar, Emirates and Singapore Airlines are still unattainable levels for us. when we begin to provide services in the same way, then it will be possible to pose something of ourselves. and our managers from the KGB know how to work only in unbeatable conditions. how is it, someone other than us will "milk our cow" (Europe), they are enemies at once, Islamists, Pendossian henchmen, etc.
    in our country and within the country, they are accustomed to "crushing" competition with rubbish, faces, prosecutors, or at worst - stupidly with arson and murder.
    no, friends, we won’t learn how to work in a good way and we will never see a normal economy at home.
  7. knn54
    knn54 14 November 2013 15: 19
    0
    There are other players (except Gazprom) in the global market who have indicated Qatar where he can work. I would not trust 100% voiced gas reserves of Qatar. Usually, Western experts overestimate the presence of hydrocarbons to increase the cost of the field and attract investors. Qatar will not want to share money with the “transit countries” and PMCs (security). Crowds of investors and energy-intensive technology also affect the cost of SVG.
    I think that our government (with all its shortcomings can know how to count money) would hurt, but would implement a LNG project ...
    And Russia needs to intensively develop its “LNG capacities” in the world market. I think that TODAY LNG terminals are not more expensive, but more reliable than gas pipelines ...