Qatar and gas market prospects
Many experts are beginning to talk more and more about the beginning of the third world war, which in the present conditions is called gas. At the same time, they cite the failure of the Kiev-Moscow-Brussels tripartite talks, the transfer of Ukraine to the system of prepaid gas supplies, mutual claims to an international court and the very disturbing fate of gas transit to Europe. And so, the energy war of Russia and Europe began. Announcing gas supplies to Ukraine only on a prepaid basis, Moscow actually announced the cessation of gas supplies there. The Old World is in a light panic: Ukrainian gas storage facilities are half-empty, and if they are not filled, the gas shortage in the EU will become noticeable at the very first autumn cooling.
It is quite clear that in these conditions, the countries of Europe, wishing to reduce their energy dependence on Russia, want to resort to the following sources of resources: Qatar liquefied gas and such countries as Norway, Egypt and the United States of America. For example, the Hungarian President Janos Ader stated that the Visegrad Four countries (Poland, Hungary, the Czech Republic and Slovakia) intend to import liquefied gas from Qatar to reduce dependence on gas supplies from Russia, on which Central Europe depends on average for 80%.
Under these conditions, more and more attention in the world market is paid to the state of affairs in the gas industry of Qatar and its ability to increase deliveries of “blue fuel” to Europe, where until recently Gazprom has dominant positions. By a surprising coincidence of geological circumstances, a small state of Qatar on the Persian Gulf has the world's third largest reserves of natural gas, concentrated in addition to traditional deposits. Qatar, as is known, produces more than 50% of GDP, 85% of export value, and 70% of the state budget revenues in oil and gas production. Oil and gas (the Arabs consider it a gift of Allah) made this small emirate the first country in the world in terms of per capita GDP, exceeding 100 thousand dollars.
To this we can add that the annual population growth that the country demonstrates in the long term up to 2015 will allow it to maintain its leading position on this indicator not only among the Gulf countries, but throughout the world, this forecast is contained in the published report of the UN Foundation (UNFPA ). According to experts, the next two years, the population of Qatar will increase by an average of 5,9 percent.
The Qatari emir has repeatedly stated that Qatar is able to compensate for the losses of Europe in the event of failure to purchase Russian gas. It is not surprising that most of the world's media commented on these statements under the sensational headline - “Qatar is already ready to replace Russia on the European gas market today, pointing out Europe’s significant dependence on Russian energy resources. Indeed, for example, only one Germany currently imports from Russia 20% coal, 34% oil and 31% natural gas, for which 33 pays a billion euros every year. The dependence of other European countries is not so significant, but these countries also make extensive use of Russian energy resources.
It should be noted that Qatar and Russia face the same problems associated with the production of shale gas in the United States. However, as the Qataris themselves say, the emirate is not going to reduce the volume of natural gas supplies to Europe and Asia, despite forecasts for the emergence of cheap US shale gas in these markets, but makes useful conclusions. Nevertheless, Qatar’s energy strategy has undergone surprisingly few changes, and this, in particular, is one of the evidence that the changes expected from the “shale revolution” may not be so large-scale.
A feature of Qatar is that it, not currently having gas pipelines, has fully concentrated on the production of liquefied natural gas (LNG). Currently, the country officially exports about 80 million tons of LNG, having for this the world's largest fleet of special vessels, the flagships of which are gas carriers such as Q-max (270 thousand tons of LNG) and Q-flex. Due to this, the emirate does not depend on the transit countries, being able to deliver gas to anywhere in the world. From here the vast geography of deliveries is the USA, South America (Argentina, Brazil), Europe, Asia (China, India, Pakistan, Japan, South Korea, Malaysia). Qatar builds terminals or participates in their construction for accepting its LNG worldwide - from the Adriatic to Belgium, from the American coast of the Gulf of Mexico to the UK.
In this regard, the emirate recently concluded a number of long-term highly profitable contracts for the export of liquefied natural gas (LNG). For example, the Japanese energy company Tohoku Electric has just signed an agreement to supply liquefied natural gas from the Qatargas 3 Qatari project for 15 years, starting with 2016, Platts reported. Under the contract, Tohoku Electric will import 60-90 thousand tons of LNG per year during the 2016-2018 period and 180 thousand tons - during the 2019-2030 period. In addition, with the 1999 of the year, Tohoku Electric buys about 520 thousand tons of LNG from another Qatari project, the delivery period is 22 of the year.
It should be said that the Qatargas 3 project includes a 2010 million tons per year liquefied natural gas plant, which has been operating since November 7,8. LNG is transported to other markets using ten vessels with a volume of 210-266 thousand tons each. The project participants are Qatar Petroleum (68,5%), Conoco Phillips (30%) and Mitsui & Co. Ltd (1,5%).
In addition, Qatar is close to signing an agreement with Pakistan on the annual supply of approximately 3,5 million tons of liquefied natural gas. Deliveries of up to 2,5 billion dollars a year should start from the 2015 year. Currently, Pakistan’s demand for “blue fuel” is 226,5 million cubic meters per day, which is twice the volume of gas produced in the country.
In this regard, Qatar has been the main competitor of Russian Gazprom for several years now, often supplying LNG to traditional Russian markets in the EU (for example, to Italy). He is the main competitor of Gazprom in Asia, creating competition for Russian LNG from Sakhalin and the Far East. At the same time, Doha can dump heavily, making it extremely difficult for Gazprom to maintain high gas prices at the current level. For example, a number of European companies are demanding a downward revision of prices for Russian gas, speculating with Qatari LNG.
Together with the Qataris, Europe is beginning timid attempts to establish a system for obtaining LNG, which, however, is not so simple. According to Hungarian President J. Ader, Qatari liquefied gas will be imported to Europe thanks to the new infrastructure, which is at the implementation stage. Blue fuel will be transported from the Persian Gulf to Italy.
Another pillar in the implementation plan of the President of Hungary should be the use of the Croatian regasifier, which is being built on the island of Krk. According to the EU project, from there liquefied gas will be transported to Hungary, the Czech Republic, Slovakia and Poland along the North-South corridor. At the same time, the first liquefied gas receiving terminal in Poland is being built in Сwinoujцеcie. Croatian President Ivo Josipovic said that, thanks to political stability, Croatia can play an important role in ensuring energy security in Europe, providing an opportunity to diversify gas supplies. Another opportunity to diversify gas supplies to Central European countries is related to the construction of a regasifier in Klaipeda, in Lithuania. The Lithuanian government intends to import liquefied gas not only from Qatar, but also from Norway, Egypt and the USA.
But not everything is so simple, and the task of replacing Russian energy resources with Qatar energy, for example, is very complex and requires considerable time and huge financial resources. First of all, it is required in Europe not to plan, but to have modern LNG terminals. And this pleasure is not cheap, and in modern conditions, when the European economy is not in the best condition, the question is: who will bear all these expenses? For Qatar alone, no matter how rich he is, it is beyond his power. In addition, these terminals will be located on European territory, and if Europe, for whatever reason, refuses to import Qatari LNG, the emirate will suffer huge losses.
At the same time, specialists note that not a single supplier from a third country can quickly replace Gazprom in the European market. Helge Lund, head of the Norwegian company Statoil, honestly admitted that his company will not be able to “replace supplies from Russia,” although, of course, in the short term, if necessary, it is possible to slightly increase deliveries to the EU for a short time (Norway is not a member of European Union). Qatar will not be able to do this either, since the capacities available for receiving liquefied gas in the European Union are already fully loaded, and it takes time to create new ones - it’s about years, not weeks. The situation is similar with the promises of the United States to help European allies with liquefied shale gas. In theory, this is possible, but in practice there is simply no technical possibility to “unload” it in Europe.
It is likely that the statements of the Qatari Sheikh will hasten the leaders of Russia, and above all of Gazprom, to establish a unified "gas policy" on the world stage with Qatar. In addition, there is a corresponding body for this - the Gas Exporting Countries Forum (GECF), whose headquarters is located in Doha, and its Secretary General is the representative of Russia Leonid Bokhanovsky. This international organization brings together owners of 73 percent of world gas reserves, providing 42 percent of its world production. And if you pursue a very balanced policy, then you can not clash and not resort to lower prices, but using GECF to create a fair mechanism for the distribution of world gas markets among themselves.
And to this there are all favorable conditions. After the successful onset of the terrorist organization Islamic State of Iraq and Levant in Iraq, the price of "black gold" rose by almost 5 dollars per barrel, and the gas price, which is calculated on the basis of oil prices, increased accordingly. In conditions of high prices, as is known, it is easier to agree and make joint decisions for the future.
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