OBG talks to Sheikh Khalid bin Khalifa Al Thani, CEO, Qatargas

Interview: Sheikh Khalid bin Khalifa Al Thani

How important is liquefied natural gas (LNG) to the long-term sustainability of both the energy industry in Qatar and the state’s economy as a whole?

SHEIKH KHALID BIN KHALIFA AL THANI: LNG is the number one contributor to Qatar’s GDP. Qatargas has an LNG capacity of 42m metric tonnes per annum; combined with RasGas it supplies a total of 78m metric tonnes a year. As a result of global demand, Qatargas is now the number one supplier and producer of LNG worldwide. Needless to say, LNG forms a crucial component of the country’s energy mix and plays a vital role in financing the projects under Qatar’s National Vision 2030, while generating the revenue to develop the country’s infrastructure.

With demand shifting eastward, how significant have imports from Asian economies become for LNG exporters?

SHEIKH KHALID: Japan was the foundation customer for Qatar. We commenced long-term deliveries of LNG to Japan in 1996 and opened our Japan Liaison Office that same year in Nagoya for the purpose of facilitating good customer relations and interacting with various government authorities and organisations. Our relations with customers in Asia ever since have increased significantly, with the first-time delivery of commissioning cargo to Singapore’s Jurong Island terminal occurring in April 2013.

In addition to Thailand and India, we also have long-term contracts with China and an established Beijing Liaison Office. This demonstrates that we have strong long-term connections with the Asian market, and will continue to do so in the future.

What aspects of LNG contracts do you anticipate in the coming years, if any?

SHEIKH KHALID: The vast majority of our contracts are long-term agreements and are not affected by fluctuations in the market. Obviously, the world is continuously evolving, and we have ensured that we are flexible enough to provide solutions to customers around the world, depending on their requirements. We have already shown this when we were able to divert shipments to Japan in 2011 to help the nation following the tsunami. As the world and markets change, Qatar is certainly in a unique position of being able to supply LNG wherever and whenever it is needed.

Where are Qatari LNG producers looking to supplement current production with associated products?

SHEIKH KHALID: LNG producers are constantly looking at potential opportunities related to LNG production, whether on our own or with our partners. There is already a strong market for sulphur and other items, such as helium, which have been taking on greater importance due to a lack of supply around the world.

When we see an opportunity, we will aim to bring it to fruition to the benefit of all our customers.

How will increasing shale gas production impact the Qatari LNG market, and are shale gas exploits in Australia a concern for Qatar’s customers in Asia?

SHEIKH KHALID: Being an LNG producer, we believe shale gas will contribute to the gas business overall and will promote the usage of gas worldwide. We do not see shale gas as a competitor to LNG. The output of LNG in certain markets like Indonesia and Malaysia is diminishing, so the demand for gas worldwide is increasing. Australia is currently facing a lot of challenges when it comes to developing its shale gas industry. Financing shale gas exploration and production is difficult as the industry is still in its infancy. It is very cost-intensive to extract shale gas from the ground. Also worth mentioning is that it is around three to four times more expensive to build a plant in Australia than in Qatar, as pricing is related to the cost of oil.

Luckily in Qatar, we have the advantage of sitting on the world’s third-largest reserves of natural gas with an extremely flexible LNG fleet to deliver gas to our customers. The security of supply and the flexibility and reliability of delivery are factors that Qatar excels in.