Qatar calls for dialogue, to boost gas production
KUWAIT/DOHA: HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah’s envoy, advisor at the Amiri Diwan Khaled Yousef Al-Fulaij yesterday delivered a letter from the Amir to Qatari Emir Sheikh Tamim bin Hamad Al-Thani.
Separately, HH the Amir Sheikh Sabah met Omani Affairs Minister Foreign Yusuf bin Alawi bin Abdullah at Bayan Palace yesterday.
Meanwhile, Qatar said yesterday that the demands made by nations in the Gulf diplomatic crisis were impossible to meet, as a deadline was fast approaching for the emirate to respond. Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani told a press conference in Doha that the list of demands from countries isolating Qatar “is unrealistic and is not actionable”. “It’s not about terrorism, it’s talking about shutting down the freedom of speech,” he said at a joint press conference after talks with German counterpart Sigmar Gabriel.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt – who accuse Qatar of supporting extremism – gave Doha an extra 48 hours to meet their demands after an initial 10-day deadline expired on Sunday. The demands included Doha ending support for the Muslim Brotherhood, closing broadcaster Al-Jazeera, downgrading diplomatic ties with Iran and shutting down a Turkish military base in the emirate.
Sheikh Mohammed handed an official response on Monday to Kuwait, which is mediating in the dispute, but its contents have not been disclosed. He refused to give any further details yesterday, but said Doha was looking for a solution to the month-long crisis based on dialogue. “The state of Qatar has adopted a very constructive attitude since the beginning of the crisis. We are trying to act mature and discuss the matter.”
The four countries cut diplomatic and transport links with Qatar a month ago and have suggested further sanctions could be imposed if Doha does not comply. Foreign ministers from the four countries are to meet in Egypt today to discuss the diplomatic crisis, the worst to hit the region in years. Qatar, which denies any support for extremists, has said it will not bow to pressure and that the demands seem designed to be rejected.
The country is the world’s leading producer of Liquefied Natural Gas (LNG) and yesterday the head of state-owned Qatar Petroleum said it was planning a significant production increase over the next several years. Saad Sherida Al-Kaabi told a press conference that the emirate intends to be producing 100 million tonnes of natural gas a year by 2024, up 30 percent from current levels. “This new project will strengthen Qatar’s leading position,” Kaabi said. “We will remain the leader of LNG for a very long time.”
Some officials have suggested if Qatar does not cooperate Riyadh and its allies could tell foreign companies to choose between doing business with them or with Doha. Kaabi said Qatar wanted the production increase to be carried out through a joint venture with international companies but that Doha could go it alone if necessary. “We have absolutely no fear of having the embargo in place,” he said. “If there are no companies willing to work with us we will go to 100 million (tonnes), 100 percent.”
Riyadh and its allies have also accused Doha of being too close to their regional arch-rival Iran, which shares an enormous gas field with Qatar in the Gulf. The crisis has raised concerns of growing instability in the region, home to some of the world’s largest energy exporters and key Western allies who host US military bases. Qatar’s gas riches have transformed it in recent years into one of the world’s wealthiest countries, a major international investor and a regional player that will host the 2022 football World Cup. In 1997, when its first shipment of LNG sailed to Japan, Qatar’s exports were valued at around $5 billion. That figure had reached $125 billion by 2014, according to trade data site the Observatory of Economic Complexity.
Qatar also does not have any current plans to stop exporting gas to the UAE, Kaabi added, but he said he would not rule it out if the crisis continued. “Of course if there were to be an additional escalation, I cannot say that we will never stop the gas,” he said. “This is a decision which would not only be made by Qatar Petroleum but also for the government, and of course depends on the situation in the country.” Qatar currently sends about 2 billion cu ft (56 million cu m) of natural gas a day to the UAE through the undersea Dolphin Energy pipeline, providing about a third of that country’s needs. About 200 million cu ft of that goes onto Oman.
With low production costs and LNG facilities closer to buyers in Europe and Asia, the Qatari move means US producers could struggle to sell their LNG competitively and projects still needing finance could struggle to find investors. The glut has already driven down prices. Asian spot LNG prices LNG-AS have fallen more than 40 percent this year to $5.50 per mmBtu and by 70 percent from peaks in 2014. So far, the majority of LNG is supplied via long-term contracts between producers and users which allow little flexibility and in many cases also prevent importers from reselling cargoes. With supplies far outpacing demand, analysts expect more and more LNG to be freely traded. Many producers have already started to offer contracts without resale or destination restrictions.
Qatar has pursued a more independent foreign policy than many of its neighbors, who tend to follow the lead of regional powerhouse Saudi Arabia. UAE Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan said yesterday it was “premature” to discuss what further action might be taken against Qatar. Any measures that are taken will be “within the framework of international law”, Sheikh Abdullah said at a press conference in Abu Dhabi with Gabriel, who was on a regional tour. “Any independent state has the right to take measures against any party,” Sheikh Abdullah said, urging Doha to listen to “the voice of reason and wisdom”.