Qatar is the world’s largest producer of liquefied natural gas (LNG) – has announced its intention to significantly increase its capacity in the coming years. Moreover, Qatar is ready to increase its gas expansion without regard to the level of prices for “blue fuel”. Experts warn that the world gas market, where prices for the last two years and so collapsed 5 times, for a long time bogged down in price wars. With some variations, repeats the situation of “oil war” waged earlier this year by Saudi Arabia. In the result the injured party risked Russia, gas export, which provides a significant infusion of Federal budget.
the Qatari state energy company Qatar Petroleum plans to increase production of “blue fuel” in 1,5 times by 2025 (from 75 million to 110 million tons), and almost twice – to 2027 (to 126 million tons). To do this, the company is launching the North Field, where already drilled 80 exploration wells. Under the new fuel contracts for the construction of hundreds of LNG tankers.
These plans shared by the head of the state-owned and concurrently Minister of energy of Qatar, Saad al-Kaabi. While it is absolutely not embarrassed by the fact that in the world today, against the background of the pandemic and the global economic downturn, the demand for “blue fuel” has fallen about as well as “black gold”. And gas storage run the risk of overflow, as has already happened with oil storage tanks. Accordingly, according to the laws of the market, the price of gas falls, and Qatar threatens her not to bring down.
“We are the most effective manufacturer in the world, in terms of costs and therefore can overcome market shocks,” said al-Kaabi. He added: “Many manufacturers will be forced to curtail production due to low prices, but for Qatar, this scenario is ruled out.”
note that the volume of production in 2019, Qatar has given way slightly to Australia (75 million tonnes against $ 77.5 m), but it is closer to the European market is traditional for the Russian gas expert. And because the Qatari LNG can be considered a competitor to Gazprom’s pipeline gas.
“the Goal of Qatar at any price, to take first place in the global LNG market – said the “MK” partner RusEnergy Michael Krutikhin, Now they are there there is fierce competition with Australia, but if Qatar implements its plans, it will become the undisputed world leader.” For this two years ago, an Arab state abolished the effect of nearly a dozen years, the moratorium on the development of new gas fields, and now intends from half to increase their power. The Krutikhin confirmed that the production and liquefaction of gas here is extremely cheap, which gives Qatar a considerable competitive advantage. “Your cartel, similar to OPEC in the gas, so the market here can be won anything”, – said the expert.
meanwhile, Russia is facing new challenges in the European gas market, where prices have already fallen below the point of profitability of “Gazprom”. This week on the biggest gas hubs – the UK NBP, Dutch TTF spot prices hit $45 per thousand cubic meters. On the hub in Baumgarten, Austria (the most close to Russia) gas is a little more expensive – $63 dollar.
According to the head of IAC “Alpari” Alexander Razuvaeva, these prices are not profitable to Gazprom, which has a zero level of profitability is at the border of $100 dollars per thousand cubic meters. Note that in 2018 the Russian company had the opportunity to sell its gas to Europe at $245 per thousand cubic meters.
Today’s statistics show that liquefied gas gradually pushes the Russian to the European market. For January-April delivery of “Gazprom” in the EU fell by 20%, while Germany reduced purchases by 46%, and Turkey is 7 times. The same influx of LNG over the same period increased by 16% (to 39.5 billion cubic meters), estimated by experts of the SKOLKOVO energy Centre.
Analysts warn that the European gas market is rapidly heading down the ramp, updating historical lows against the background of the influx of LNG, the crowded stores and quarantine measures. Well, the new batch of offers from Qatar will lead to the fact that the gas market will remain razbalansirovat and after the pandemic.
Russia is extremely negative situation. For the first quarter of 2020 “Gazprom” for the first time in history were a loss of $ 306 billion. It will be even worse. According to the forecast of “Gazprom” in this year of its gas sales to Europe will fall by 17% to 165 billion cubic meters, and the average price will crash by a third. Thus, the company could lose up to $20 billion dollars of export revenue.
“,”Gazprom” has already carried a major loss – confirms Mikhail Krutikhin, Because 57% of them sold in Europe are tied to gas prices of nearby hubs, which are lower profitability. The remaining volumes are sold at prices that are somehow tied to oil, which also has fallen. So that significant losses of the Russian gas monopoly is inevitable.”
Situation of a “gas war” that is going to unleash Qatar, is dangerous because it will lead to long-term stagnation of the gas market, warns the head of the analytical Department AMarkets Artem Deev. Well, the main injured party, according to the expert, it may be Russia, as the country’s GDP and 50% formed by the revenue from the sale of hydrocarbons and the finished fuel. “If Qatar will begin to lower prices for LNG, the demand for “blue fuel” will be reduced even more, and the Russian budget will lose this year, 50-70% of oil and gas revenues”, concludes the source of “MK”.