Good signals from Qatar give Petronet-LNG green light

Vol 12, PW 21 (26 Mar 09) People & Policy
     

If ever there were a â€کright time’ for Petronet-LNG to kick-start its talks with Qatar for more LNG, this is probably it.

According to well-placed sources in Doha, Petronet-LNG should exploit â€کpositive signals’ emanating from the Qatari energy ministry, revealed in a two-page briefing from the Indian embassy to oil ministry joint secretary international cooperation Sunil Jain, despatched to Delhi on March 12. “Now is the time for Petronet-LNG to make a serious follow-up,â€‌ reports a source.

“Demand contraction in Europe means some contracts starting this year might not get executed. Surplus (LNG) might be available.

â€‌ Whether that â€کsurplus’ comes from RasGas or Qatargas, both subsidiaries of Qatar Petroleum, is unclear. What is clear is that Petronet-LNG has enough scope to step up pressure for another 1.5m t/y from Qatar to coincide with first shipments of the 2.5m t/y second â€کtranche’ of its 25-year SPA for 7.5m t/y.

Other positive signals include typically â€کnon-committal’ replies by Qatari energy officials during the 7th Doha Natural Gas Conference between March 9 and March 12, when asked if some supplies for Europe might instead go to India or China. “Much of the political groundwork has already been laid,â€‌ we hear.

“In some countries it’s a â€کcompany-to-company’ relationship, but Qatar is an absolute monarchy. Any additional LNG for India will be a â€کgovernment-to-government’ initiative.

Nothing moves here without agreement from the top (Emir Sheikh Hamad Bin Khalifa Al Thani).â€‌ Doubtless the last few months have seen intense political contact, beginning with last November’s Doha visit by Prime Minister Manmohan Singh, during which he met the Emir and launched a â€کmonitoring committee’ to oversee trade - dominated by Qatari LNG exports to India.

In January this was followed by the Delhi visit of Qatari energy minister Abdullah bin Hamad al-Attiyah as guest of honour at Petrotech when he met foreign minister Pranab Mukherjee.