Qatar is the world’s largest exporter of liquefied natural gas (LNG) and produces up to 77 million tonnes of gas each year. In April 2017, the Gulf state announced it was boosting output in the world’s largest gas field – the “North Dome” – off Qatar’s northern coast, which it shares with Iran. Gas has helped transform the emirate into one of the richest countries in the world, propelling its rise into a major regional player and helping Qatar fund huge infrastructure projects and host major events such as the 2022 FIFA World Cup.
So when four Arab states – Saudi Arabia, the UAE, Bahrain and Egypt – severed diplomatic and trade relations with Qatar on June 5, cutting off land, sea and air links, there were concerns about the effect on Qatar’s economy. How would the diplomatic rift between Qatar and some of its neighbours affect Qatar’s economy, and Qatar’s oil and gas industry in particular? Al Jazeera spoke to the president and CEO of state-run Qatar Petroleum, Saad Sherida al-Kaabi, about the GCC crisis, Qatar’s oil and gas industry, and the future of his company.
According to al-Kaabi, the GCC crisis will not affect the output and Qatar will not cut off gas to the UAE – despite a “force majeure” clause in the Dolphin gas pipeline agreement with the UAE. The Dolphin gas pipeline pumps around 57 million cubic metres of gas a day to the UAE.
“If you stop the gas, the biggest harm is to the people of the UAE. The people of the UAE are cousins, relatives, and friends … and we have nothing against them,” Kaabi said. According to analysts and industry sources, a shutdown of the 364km Dolphin pipeline, which links Qatar’s giant North Field with the UAE and Oman, would cause major disruptions to the UAE’s energy needs. And in addition to the Dolphin pipeline, there are other agreements Qatar has signed with the UAE.
“We signed a new contract for 10 years supplying two to 300 million cubic feet [8.5 million cubic metres] a day of gas, we also have a 15-year contract to supply Dubai with LNG shipment, so that’s about 40 percent of their requirement for electricity,” Kaabi said. However, the Qatar Petroleum chief does not expect things to go back to normal.
“We will never go back to depending on one supplier,” he said. “The trust that we have built over the years has been broken over night.” Most of Qatar’s almost 80 million tonnes of annual LNG supplies are shipped in tankers to different countries. The air, sea and land restrictions imposed by its three Gulf neighbours have not so far affected maritime routes for Qatari LNG vessels, which can pass through the Strait of Hormuz. “We supply Japan, Korea, China, Taiwan, Thailand, Pakistan, India. In the Middle East, we supply the UAE, Kuwait, Jordan, Egypt, Turkey, (we also supply) Spain, France, Belgium, Poland, Germany, UK. We supply everybody that needs LNG. There is not a buyer of LNG that does not call on Qatar to supply it,” Kaabi said.
“Everybody was worried about supply, but … these countries cannot stop us from doing our business internationally, they can do minor things that I think will harm them in the long term more than us.” Kaabi said he is very positive about the future of Qatar’s oil and gas industry: “We will continue to dominate the gas market and be the leader in the gas market for the foreseeable future … We are going to grow in a major way internationally in the oil and gas sector … ”
“I would like to thank the four countries for their blockade, because it has made Qatar stronger, the people of Qatar stronger, their businesses stronger. We will come out of this much stronger than before.”