Qatargas CEO says gas union to promote supply advantages
Russia, Qatar and Iran, who together control more than 60% of global natural gas reserves, last year agreed to create a 'gas OPEC' for joint exploration and production. Consumer nations fear the troika will drive up prices. But the head of Qatargas told Business RT they will not put in OPEC-style production quotas, or market control mechanisms.
President and CEO of Qatargas, Faisal al-Suwaidi emphasized that gas is a different commodity to oil and that market control mechanisms as used by OPEC, the oil producer’s cartel aren’t going to happen.
“I don’t think this (production quotas, other market control mechanisms) will happen. It’s not oil. Gas, especially LNG, is a totally different business, it’s a long-term business. There’s a pricing formula, quantities that are already specified, and more importantly confidentiality agreements, that you cannot discuss the price and other commercial issues. The aim of cooperation is to make more quantities available to the market. Savings can happen. One example that comes to mind is sending cargoes for each other. These will lead to a legal framework, these are advantages.”
The head of the worlds largest LNG producer, al-Suwaidi noted that while the proposal for a gas union had created some concern, the intent behind it was to create greater certainty and clarity of supply, with better outcomes for consumers.
“This has given some buyers bad impression, but this is good for consumers, not necessarily just for producers. It will increase the reliability of existing plans, future plans, we will exchange views how to do better job, cooperating. It will be good for all the markets, and all the consumers.”