DOHA // Qatar is looking close to home for buyers for its natural gas as a glut has dampened prospects elsewhere. The emirate is in talks with Lebanon and Turkey over potential exports of liquefied natural gas (LNG), Abdullah al Attiyah, the deputy prime minister and energy minister, said on the sidelines of an industry forum in Doha.
"Demand for gas is huge," he told the forum. "We see this even in the Middle East, with big shortages of gas in many Middle East countries." Analysts agree. "I think global demand for gas will recover more quickly than anticipated, driven by developing countries mainly in Asia and the MENA region," Hakim Darbouche of the Oxford Institute for Energy Studies recently told Reuters. Qatargas, a subsidiary of the government-owned Qatar Petroleum, was in talks with Botas, the Turkish state-owned pipeline operator, over LNG sales, Mr al Attiyah said. Its sister company Rasgas, which also produces LNG, is already exporting the fuel to Turkey.
In addition, Lebanon is seeking to purchase 3 million tonnes of LNG from Qatar, which expects to raise its annual export capacity to 77 million tonnes by the end of this year. While Lebanon needs additional gas supplies to generate electricity, Turkey is seeking to become a transit and trading hub for oil and gas supplies to Europe. It is unclear whether potential Qatari exports of LNG to Turkey would replace a proposal discussed by Ankara and Doha last year to build a gas pipeline between the two countries. Exports of the supercooled liquid gas by tanker could be implemented faster than the challenging development of a pipeline across Saudi territory.
While it had seemed reluctant to supply more gas to Arab states, following the start three years ago of 2 billion cubic feet per day of pipeline gas exports to the UAE and Oman, Qatar recently struck deals for summer exports of LNG to Kuwait and Dubai. LNG exports to Dubai would begin next year, Mr al Attiyah said. Kuwait started importing LNG from Qatar and elsewhere last summer, after it completed the construction of a floating terminal to receive the supplies. Dubai is building a similar LNG receiving and re-gasification facility in waters off its main port of Jebel Ali.
As Qatar Petroleum embarked on an ambitious project to more than double its LNG export capacity over two years from 2008, it was eyeing opportunities to broaden its global reach with long-term contracts for LNG exports to Europe and North America. Those plans were thrown into disarray by the recession, which triggered a big drop in global gas demand, and by the rapid development of huge US deposits of shale gas.
That has left the door open for Gulf and Levantine states to receive more gas from Qatar, which sits on the world's third-largest gas reserves. tcarlisle@thenational.ae