Qatar emir attending GCC meeting
Gas exports to UAE averaged 1.8-2 Bcf/day during blockade
Rift broke out in June 2017
Dubai — Qatar's energy exports are unlikely to get a boost even as the almost four-year rift between Doha and three Gulf countries is set to ease with the Qatari Emir attending a key regional summit and Saudi Arabia reopening its borders with Doha Jan. 5.
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Register NowQatar's Emir Sheikh Tamim bin Hamad al-Thani will join leaders from the six-member Gulf Cooperation Council in the Saudi ancient city of AlUla, state-owned Qatar News Agency said Jan.4. It will be his first visit to Saudi Arabia since Riyadh, the UAE, Bahrain and Egypt severed ties with Doha in June 2017.
UAE Prime Minister and VP Mohammed bin Rashid Al Maktoum, who also serves as Dubai ruler, is leading the UAE delegation to the GCC meeting, according to UAE news agency WAM.
The three Gulf states, along with Egypt, accused Qatar of alleged support of terrorism and Iran among other charges, which Doha has denied. The other members of the GCC are Oman and Kuwait, which has mediated to heal the Gulf rift. The commercial blockade of Qatar prompted it to get closer to Turkey and more importantly to Iran, raising the ire of the US and the three Gulf states.
The Qatari Emir's attendance of the 41st GCC summit will coincide with the reopening of air, land and sea borders with Saudi Arabia, the Kuwaiti foreign minister Ahmad al-Sabah said Jan. 4. UAE, Bahrain and Egypt still maintain their air, land and sea blockade of Qatar.
LNG exports
Qatar was able to keep exporting LNG to the rest of the world, despite the blockade, which hit its aviation industry with state-owned Qatar Airways unable to use the skies of blockade countries for its flights. However, Qatar left OPEC on Jan. 1, 2019 amidst the blockade, saying it wanted to focus on developing the gas sector, in a blow to the unity of the oil group, which it had joined in 1961.
Throughout the blockade, Qatar also kept the gas taps to the UAE open, with flows through the Dolphin pipeline averaging 1.8-2 Bcf/day and meeting about 20% of the UAE's gas demand, according to Samer Mosis, S&P Global Platts Analytics team lead for EMEA LNG.
"This dependence is one of the driving factors behind Abu Dhabi's efforts to expand domestic natural gas production," he said.
Qatar's energy minister and CEO of Qatar Petroleum Saad al-Kaabi told Platts in a 2019 interview that Doha had no plans to mix politics and business, adding that the Gulf state is "a steady and stable supplier."
Qatar's plans to expand its LNG capacity or decision to quit OPEC is unlikely to change if the blockade is ended, according to Edward Bell, commodities analyst at UAE-based lender Emirates NBD. "I don't think that we would see much of an impact on Qatar's plans to expand its LNG liquefaction capacity as any investment partners are likely to come from IOCs outside of the Middle East," he said. "Qatar is clearly targeting natural gas as a long-term fuel for an energy transition and has ample reserves to develop in support of that goal."
OPEC membership
Qatar also doesn't need to officially rejoin OPEC "as other countries in the GCC, such as Oman, have been participating with OPEC+ production decisions while remaining outside of the core OPEC bloc," Bell said.
Qatar currently has an LNG production capacity of some 77 million mt/year, but has plans to boost it to 110 million mt/year by 2025 with the addition of four more trains and to 126 million mt/year by 2027 with the addition of two further trains.
Qatar's LNG trade is unlikely to change significantly if all countries end the blockade, according to Siamak Adibi, head of the Middle East gas team at FGE in London. "If the UAE-Qatar border gets open, we would see some Qatari LNG cargoes heading to Dubai," he said. "Normalizing the relationship between Saudi allies and Qatar will also help for resumption of Qatar's condensate supply to Dubai and possibly deliveries of some spot LNG cargoes to Bahrain's LNG terminal in the near term."
The UAE has ramped up efforts to boost its gas production from conventional and unconventional gas as it seeks to attain self-sufficiency of the commodity.
Abu Dhabi National Oil Co., the UAE's biggest oil and gas producer, is undertaking multi-billion dollar projects with IOCs to develop its costly sour and unconventional gas assets to ramp up output.
In 2019, Abu Dhabi's Supreme Petroleum Council, the emirate's highest energy decision-making body announced the discovery of 160 Tcf of unconventional gas recoverable resources.
"Perhaps the one significant change is that companies such as Exxon and Total, which have significant activities in the UAE and Saudi and Qatar, are concerned of the political optics of dealing with Qatar," said Robin Mills, CEO of Qamar Energy. "But I don't think that puts them off, there's always an understanding that big IOCs operate in politically opposing countries."
January 05, 2021 at 02:12PM
https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/010521-qatars-energy-trade-seen-little-changed-as-gulf-rift-eases-borders-with-saudi-reopen
Qatar's energy trade seen little changed as Gulf rift eases, borders with Saudi reopen - S&P Global
https://news.google.com/search?q=little&hl=en-US&gl=US&ceid=US:en
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