Qatar becomes first GCC nation to supply LNG to East Europe

Qatar has agreed to supply one million tonnes of liquefied natural gas (LNG) per year to Poland to further expand its global supply network and become the first Gulf Arab LNG producer to penetrate the growing East European gas market.

Qatargas, one of the two government-controlled LNG producers in Qatar, will start exporting LNG to Poland’s main gas company, PGNiG Group, in 2014 under a 20-year supply agreement signed in Doha on Monday.

The LNG will be transported by tankers to a terminal to be built by PGNiP in Poland to receive the imported gas and distribute it across its network.

Qatargas Chairman, Abdullah bin Hamad Al Atteya, who is Qatar’s Deputy Premier and Minister of Energy and Industry, signed the agreement with PGNiG President and Director-General Michal Szubski.

“This agreement is very important because it is the first between Qatar and an East European country and there is no doubt it will contribute to further strengthening relations between our countries,” Atteya said.

The agreement with PGNiG had been scheduled to be signed early this year but was cancelled. Qatari and Polish officials at the time did not specify the reason for the cancellation but industry sources said the move could have been prompted by differences on prices or other details of the long-term contract.

Qatar, which controls the world’s third largest gas resources, pumped nearly 30 million tonnes of LNG last year and is pushing ahead with projects to attain its production target of nearly 77 million tonnes in 2012.

Actual output is expected to surge to nearly 45 million tonnes this year and around 70 million tonnes in 2010 before peaking at 77 million tonnes in 2012. By that year, Qatar will be pumping nearly 30 per cent of the world’s LNG supply.

Qatar, a small Opec oil producer, launched LNG projects in mid 1990s to tap its massive offshore North Field, the world’s largest reservoir of non-associated natural gas, estimated at more than 900 trillion cubic feet.

The Gulf country has already secured enough supply deals to press ahead with planned projects but officials have said the 6,000-km North Field, which straddles the Qatari and Iranian water, has the capacity to pump for more than 100 years and meet supply commitments to more markets beyond the targeted output.

The United States has emerged as the largest customer of Qatargas and Rasgas, as it will receive more than 20 million tonnes of LNG by 2012.

Other main buyers include Britain (eight million tonnes), Japan (7.5 million tonnes), India (7.5 million tonnes), South Korea (seven million tonnes), Belgium (5.5 million tonnes), Italy (4.7 million tonnes), Spain (three million tonnes), and Taiwan (three million tonnes). Another deal was signed with Total and ExxonMobil for the supply of around eight million tonnes.

In a recent interview with Emirates Business, a Qatar Petroleum official said Qatar is already the largest LNG exporter after overtaking Indonesia and its output in 2012 will account for almost 30 per cent of the world’s LNG exports.

“In 2012, we will be producing 77.5 million tonnes of LNG. We will reach that level as all planned projects are on track. Another milestone project is RasGas 6, which will be officially inaugurated in October,” said Sultan Abdulla, Communications Manager at the Government-controlled QP.

“This means that in 2012, we will be by far the largest LNG exporter in the world.”

He said Qatar’s two main LNG producers, RasGas and QatarGas, are now supplying LNG to three continents, including Europe and Asia.

(Emirates Business & Zawya)


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