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Qatar shifting LNG from US to emerging markets 3, November 2010

Posted by thegulfblog.com in American ME Relations, LNG, Qatar.
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Qatar is to divert LNG from America to Asia and South America. This should come as a surprise to no one. Even though Qatar recently opened a multi-billion dollar LNG regasification plant in Texas, there surely need to be serious questions asked as to its medium term viability.

People have known that huge quantities of shale gas exist in America for decades. However, until (very) recently, there was no economical way to extract this gas. Now that such technologies exist that allow America to exploit this resource, importing terminals such as Qatar’s Golden Pass in Texas look somewhat redundant.

Aside from this potential white elephant, the fact that Qatar may lose America as an important client is more of a disappointment rather than a catastrophe. Clearly, Qatar would have liked to establish an energy relationship with America. Regularly supplying a meaningful percentage of US gas would give Qatar if not influence or sway then at least more respect in some nebulous way. Perhaps it would make US officials more reticent in criticising Qatari policies (it seems to work that way with Saudi Arabia).

Indeed, Qatar would ideally like to improve their relations with America which are – frankly – not very good. This much was admitted by the Emir in his recent FT interview. An important energy supplying relationship could have gone some way to establishing another point of commonality. At the moment, the Qatar-US relationship is based primarily on the fact that both of them know that the other can’t do without the stationing of US troops at Udeid (and other) bases in Qatar. This isn’t the most ‘positive’ basis for a friendship.

Overall, the demand for gas is strong. Not only are the emerging markets likely to experience practically continual growth for the foreseeable future but gas is a relatively ‘green’ fuel, further increasing its attraction.

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