Page 5 - GLNG Week 19 2021

GLNG COMMENTARY GLNG

Qatari Minister of Energy Saad Al-Kaabi, who However, the move away from Australian
is also QP’s president and CEO, had told IOCs in coal has left China more dependent on Austral-
meetings in recent months that the company no ian LNG. As tensions escalated last week and
longer depended on them to fund new projects. Beijing suspended all activities under the Chi-
The source added that Qatar was not necessar- na-Australia Strategic Economic Dialogue, this
ily opposed to partnering with these compa- has led to mounting speculation over what will
nies, but would be seeking terms that are more happen to Chinese imports of Australian LNG.
favourable to it. Some believe that China relies too heavily on
This is in line with QP’s previous comments, Australian LNG – which accounts for over 40%
suggesting it would consider undertaking the of its imports of the fuel – to take such drastic
North Field expansion alone if it could not action, but others argue that as with coal, Bei-
reach a favourable deal with any partners. jing will not be deterred by the cost of any such
Indeed, Qatar’s LNG development has helped moves. Indeed, Bloomberg reported this week
the country to build up a sovereign wealth fund that at least two of China’s smaller LNG import-
holding more than $350bn in assets, putting ers had been told to avoid buying new cargoes
QP in a good position to move forward even from Australia. The verbal orders are reported
if it does end up going it alone. Nonetheless, to have come from government officials,
reports of these talks suggest that partners – according to sources familiar with the matter, For China,
whether Chinese or otherwise – have not yet and affect future LNG purchases from Australia
been ruled out. over the next year, but not already purchased or meanwhile, new
Other comments by Al-Kaabi suggest that contracted cargoes. partnerships with
Qatar still sees IOCs as useful partners, but for Larger Chinese importers of LNG, which
helping it secure access to global buyers, rather account for a combined 90% of imports, have Qatar could be
than for funding new capacity. This has led to not been given any such guidance as yet, accord-
speculation that these companies could carry on ing to separate traders cited by Bloomberg. The timely, given the
participating in Qatar’s LNG industry, but with news service suggested that this meant the
their level of participation reduced. impact on LNG imports may be limited; how- Asian country’s
ever, a further escalation of tensions that ends worsening
Chinese relations up affecting LNG cannot be ruled out.
For China, meanwhile, new partnerships with In addition, Chinese companies are already relations with
Qatar could be timely, given the Asian country’s reluctant to sign long-term LNG supply con-
worsening relations with Australia. The dispute tracts with Australian exporters or invest in new Australia.
between the two countries has led to various projects since relations between the two coun-
unofficial bans and tariff actions by Beijing tries worsened last year. Under these circum-
against Australian commodities and products. stances, investing in LNG projects elsewhere
Notably, this included an informal ban on Aus- could look all the more attractive.
tralian coal, imposed last year following Canber- Sinopec has already signed a long-term sup-
ra’s call for an independent investigation into the ply deal with QP earlier this year. This could be
origins of the coronavirus (COVID-19). a sign of things to come.™

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