BY MOHAMMAD SHOEB
DOHA: International prices of natural gas have started facing downward pressure because they are indexed to the price of crude oil, which has declined significantly and hovering around $85 a barrel.
Qatar, the world’s largest exporter of liquefied natural gas (LNG), says it is not worried about the dwindling oil prices, said Nasser Al Jaida (pictured) , CEO of Qatar Petroleum International (QPI) and Vice-Chairman of Qatar International Petroleum Marketing Company (Tasweeq). yesterday. “It is true that all the major oil producers in the world are worried, but I don’t think Qatar should be much worried because we still are the lowest cost producer in the world,” said Al Jaida.
Al Jaida, speaking on the possibility of de-linking of gas prices to crude oil told The Peninsula on the sidelines of the 18th Condensate Naphtha Forum that “We have been saying that gas prices have to be de-linked from oil, but I don’t know when it will happen. Today the market price of oil is going down, I don’t know whether it is appealing to us or not.”
Asked about the impact of rapidly changing global energy outlook on Qatari economy, Al Jaida, said: “Shale gas is an opportunity and not a problem for us. So far nothing has changed much, and I don’t think it is going to cause any significant impact in the long run.”
On the marketing strategy and price competitiveness of products, he said: “We have to act according to the market. It is not a matter of offering discount or asking for premium. We act accordingly to the market indicators.”
“Nearly 18 mbpd of crude oil is being exported daily from the Middle East, and we would like to see its position remaining unchanged irrespective of the price of oil. As far Qatar, being a major gas supplier in the world, we will continue to retain our market share by catering to our valued customers across the world.”
With the rapidly changing global energy outlook, especially with regard to the post-Fukoshima nuclear disaster (as many countries have started switching from nuclear power to conventional sources) and shale gas revolution in the US, there is a major divergence in gas prices in different parts of the world resulting in many issues, including efficiency and competitiveness.
The prices of natural gas in the US are at all-time low, while prices in other parts of the world such as Asia and Europe are very high. This is largely because of the advent of hydraulic fracturing technology which has significantly reduced the cost of extracting shale gas in the US. This is turning the world’s leading energy importer into the world’s largest energy producer, pushing Saudi Arabia to the second position in terms oil production much before than forecast earlier.
According to International Energy Agency (IEA), prices of gas in Europe have become three times higher than in the US and five times more expensive in Asia. This huge price differential has become a major cause of concern among gas importers as their energy intensive industries are finding it hard to compete with their rivals in the US and other energy-rich countries, thus advocating for uniform energy prices.
The Peninsula
