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Qatargas-RasGas merger set to consolidate LNG lead: Al-Kaabi
Mon 21 Rabi Al Thani 1439 8-1-2018
QGN Bureau Staff
The Qatargas–RasGas merger has many benefits including that all of the country’s competencies in LNG are in one place, said Qatar Petroleum president and CEO Saad Sherida al-Kaabi. “There are many benefits that are not talked about. For me, the number one benefit is that I have one entity in Qatar marketing Qatar’s LNG. Until this we had RasGas in India, Qatargas in China for instance, and it was nonsense,” al-Kaabi said in an interview with MEES.
This file photo taken on February 6, 2017 shows part of the Ras Laffan Industrial City, Qatar’s principal site for the production of liquefied natural gas and gas-to-liquid, some 80km north of the capital Doha. The Qatargas–RasGas merger has many benefits including that all of the country’s competencies in LNG are in one place, said Qatar Petroleum president and CEO Saad Sherida al-Kaabi.
“Now we have one company, one marketing arm, one operation, and one finance. All of your competencies in LNG are in one place. And the savings are huge. Two billion riyals operating costs saved annually,” al-Kaabi said. Asked whether the long-term sales deals that are expiring over the next five to 10 years would be renegotiated, al-Kaabi said, “It depends. To us our preference is a long-term deal, and the buyers’ preference is for a long term deal. To us and to buyers, long-term stability, reliability and security of supply are the number one elements. The majority of the big buyers will have a good baseload with long-term contracts and they will then top it up with fluctuating spot volumes to have a better competitive advantage.”
On the reported delay in Barzan gas project, al-Kaabi told the MEES, “It’s delayed because we have had issues with the pipeline. That is not a secret. The contractor did not perform as well as we wanted them to. The mitigation is already being done, we are buying new pipeline and have done all of the engineering for that. We are proceeding to rectify the issues and hopefully in a couple of years that will be fixed.
“It’s very unfortunate, but things like that do happen. All of the onshore facilities are finished and ready, the wells are done. It is the pipeline that had an issue. For us safety and the lives of people are paramount.” To a question related to financing the North Field expansion, al-Kaabi said, “Raising financing from international markets could be a possibility. But we could easily finance it internally. If we do take that option, it would just be to leverage the project and develop some relationships. Going to the debt markets can be a good economic option as you get a higher internal rate of return (IRR). But it depends on the situation. Once we get to it, we will decide what we want to do. But QP is unbelievably financially solid. I could build this 10 times without having to go to the market.”
Sources and photo-credits: Gulf Times
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