Qatar Petroleum’s (QP) CEO, Saad Sherida Al-Kaabi, said that Qatar will merge state-owned liquefied natural gas producers Qatargas and RasGas Co Ltd, Reuters reported.
The transition, which will result in a single company called Qatargas, will take around 12 months to complete and will begin before the end of 2016. The merger comes in line with QP’s recent cost cutting efforts to adjust to low oil prices globally, according to LNG World News. Al-Kaab stated that the move would save “hundreds of millions of dollars,” adding that some areas of the business could see job cuts.
The continually decreasing oil prices since 2014 has forced Gulf countries to reduce state spending and consider consolidations as a way to cut costs: among the biggest being Abu Dhabi’s merging of Mubadala and International Petroleum Development Company.
Qatargas is the largest liquified natural gas (LNG) producing company in the world, with an annual output capacity of 42m tons a year. While QP owns a majority stake, global energy firms including Total, Mitsui & Co, and ConocoPhillips also hold small stakes in the firm. While, RasGas has a production capacity of about 37m tons a year. It is a joint venture between QP and Exxon Mobil, with 70% and 30% stake respectively.