Ship Sunk By Houthis Threatens Red Sea Environment
By Mohammad Ghobari ADEN, Yemen, March 2 (Reuters) – A UK-owned ship attacked by Houthi militants last month sank in the Red Sea, the U.S. military confirmed on Saturday, as it echoed...
By Simone Foxman (Bloomberg) Qatar wouldn’t be able to significantly ramp up supplies of natural gas to Europe in the event of any disruption to Russian flows, according to three people familiar with the situation.
U.S. President Joe Biden’s administration has spoken to major gas producers, including Qatar, about the possibility of getting more shipments sent to Europe in case a potential Russian invasion of Ukraine interrupts flows. Russia’s President Vladimir Putin has repeatedly denied having any plans for an invasion.
Qatar, one of the world’s biggest exporters of liquefied natural gas, is already producing at full capacity and most of its cargoes are sent to Asia under long-term contracts that it can’t break, the people said. The Persian Gulf state doesn’t want to compromise those Asian partnerships even if doing so would reap political rewards in Europe and the U.S., they said.
The U.S. is prepared to ensure alternative supplies covering a significant majority of any potential gas shortfall, two senior Biden administration officials said Tuesday. Re-routing supplies could take anywhere from several days to a week or two, the officials said.
The U.S. is looking at a range of contingency options and talking to various allies and companies around the world, a spokeswoman for the National Security Council said.
Secretary of State Antony Blinken spoke to his Qatari counterpart, Mohammed bin Abdulrahman Al-Thani, on Monday. They “discussed Russia’s unprovoked military buildup near Ukraine’s borders,” according to the U.S. State Department.
State-controlled Qatar Energy sells some LNG on the spot market, which could be mostly sent to Europe. But the volumes would be too small to make much difference, the people said.
In 2011, Qatar was able to move some cargoes from Europe to Asia when LNG rates surged after Japan switched off its nuclear power stations following the Fukushima disaster. Those switches were carried out with the approval of Qatar’s European clients.
Europe’s become a more attractive market for spot LNG suppliers since prices there reached records last month. Yet Qatar has only shipped six cargoes to northwest Europe, the region’s biggest market, since mid-December, according to ship-tracking data compiled by Bloomberg. Over the same period, the U.S. delivered 42 shipments.
Qatar’s energy minister, Saad Al-Kaabi, said in October the country was unable to pump more gas to help bring down prices, which have soared in the past year as the global economy rebounds from the coronavirus pandemic.
“We are maxed out,” Al-Kaabi said at the time, adding that Qatar’s LNG exports were around 80 million tons a year. “We’re producing what we can.”
Decisions about whether gas is sent to Europe or Asia are based on “market forces,” he said.
Qatar is spending almost $30 billion to increase its output capacity by 50%, but the project isn’t expected to yield its first gas until the end of 2025.
By Simone Foxman, Ben Bartenstein and Jennifer Jacobs, with assistance from Anna Shiryaevskaya and Verity Ratcliffe.
© 2022 Bloomberg L.P.
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