Monday, May 24, 2010

Qatar may export just 6 million mt/year of LNG to US: Attiyah

Qatar may end up exporting just 6 million mt/year of LNG to the US after
diverting as much as 20 million mt/year to other countries, Qatari oil
minister Abdullah al-Attiyah said in an interview published Monday, without
giving a firm timeline on when those figures would be reached.

Attiyah said that Qatar "may divert 12-20 million mt/year" away from the
US market. "This means our gas exports to the US would remain in the range of
6 million mt/year," he said in the interview, published by the Middle East
Economic Survey.

To date, Qatari LNG exports to the US have been well below those levels,
reaching just 60,000 mt in 2008 and 260,000 mt in 2009. But last year the
country commissioned several new LNG production trains, with more to follow
this year, and much of that output had been sold under contracts to US buyers.

"We have agreed with China to export 5 million mt/year and with Poland
for 1 million mt/year," al-Attiyah said. We are also negotiating to export an
additional 7 million mt/yr to China, and to India an additional 4 million
mt/year. There are negotiations with other Asian markets for an additional 3-4
million mt/year."

Qatar's contracts with US offtakers allow the country to divert term
supplies to other markets if it can achieve "better prices, related to oil,"
al-Attiyah said.

In contrast, its US LNG contracts are linked to the Henry Hub price of
gas. Some of the country's European LNG contracts also allowed such
diversions, he added.

US gas prices have been relatively low in the last few years as domestic
shale gas supplies have risen at a time of depressed demand. But oil prices
have been relatively strong in the past year, and so oil-linked LNG contracts
have been significantly above US gas prices.

For example, the US March NYMEX futures contract averaged about
$5.24/MMBtu during February. In contrast, China's imports from Qatar, which
are priced under an oil-linked contract, were delivered in March at an average
price of $675.48/mt ($12.99/MMBtu), according to customs data.
--Jonty Rushforth,

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