Register for a free trial
LNG World Shipping

LNG World Shipping

Qatar’s LNG exports should weather Arab dispute

Tue 06 Jun 2017 by Paul Gunton

Qatar’s LNG exports should weather Arab dispute

This week’s diplomatic spat between Qatar and a number of other regional states may not have a significant impact on its LNG exports, which account for more than 30 per cent of global LNG supply.

Yesterday (5 June), Saudi Arabia, the United Arab Emirates, Yemen, Egypt and Bahrain said they would sever all ties including transport links with Qatar, because of Qatar’s alleged backing for Sunni and Shia radicals, which Doha has denied.

Today, Reuters reported industry comments that “any disruption to Qatar's liquefied natural gas exports could hit global prices” although, thus far, “there is no indication so far of that happening.”

Business Monitor International (BMI) went further, asserting that any impact on the market “is likely to be small and to remain isolated.”

It based this on Qatar’s export route through the Strait of Hormuz, taking its ships through the territorial waters of Oman and Iran, which are not involved in the dispute. BMI does not rule out Oman joining the other countries opposed to Qatar, but thinks this is unlikely.

In any case, its commentary today pointed out, “the strait is protected under the transit passage provisions of the UN Convention on the Law of the Sea.”

Other factors weighing against a significant impact is Qatar’s dominance in the market: if shipments slowed, its customers would find it difficult to replace supplies.

One nation that imports gas from Qatar is India, where the Financial Express newspaper today predicted that “any attempt to stop Qatari LNG exports would invite [a] serious response from Japan, South Korea, China and India.”

Such an attempt would also damage Qatar’s “hard-won reputation as a reliable supplier.”

That could have long-term implications, it suggested, especially for Qatar’s Japanese business. Although Qatargas stepped in to support Japan with extra gas supplies after the Fukushima nuclear accident, “this incident might revive Tokyo’s 1970s-era worries over too-heavy dependence on Middle East oil or gas exporters,” the newspaper warned. “The same goes for China, which has been determinedly diversifying its fuel sources,” it went on.

Those sources are more diverse now than in the past, with Australia and the US now among those exporting LNG, giving buyers more options.

Recent whitepapers

Related articles





Knowledge bank

View all