Page 13 - AsianOil Week 22

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construction on new liquefaction projects. “With the conclusion of these milestone
There was previously more consensus on agreements, we have everything in place to com-
LNG demand outstripping supply again in the mence the largest LNG shipbuilding programme
second half of the 2020s. However, since the in history,” al-Kaabi said.
current oversupply has been exacerbated by the The vessels will serve both QP’s North Field
coronavirus (COVID-19) pandemic, doubts are expansion and the company’s Golden Pass LNG
starting to emerge about the longer-term appe- terminal in the US, which is also currently under
tite for new LNG export capacity. construction. In line with its broader expansion
Qatar appears undeterred, however. push, QP has also asked US regulators for per-
This is despite the fact that QP also said mission to increase the capacity of Golden Pass,
recently that it would cut its capital spend- even as other liquefaction projects on the US
ing by around 30% this year. QP’s CEO, Saad Gulf Coast are being delayed.
al-Kaabi – who is also the Qatari Minister of Some of the new vessels will also replace part of
State for Energy – has maintained that even Qatar’s existing fleet, and will themselves be equipped
as the spending revisions are worked out, to run on LNG thanks to dual-fuel engines that QP
QP’s LNG expansion plans remain on track. described as being of the “latest generation”.
He has also said QP will not cut its exports While rival LNG exporters – notably the
in the face of weak demand. US – also have plans to add more liquefaction
Qatar’s push for LNG dominance has led capacity, they appear to be far more cautious in
to some worries, however, that it could push the face of the market downturn, perhaps with
already low spot prices for the fuel down even the exception of QP’s terminal there. The advan-
further. For now, though, it appears that export- tage for QP is that it has the backing of its gov-
ers elsewhere in the world are far more likely to ernment, whereas many of its rivals are private
scale back in response to market conditions. players that are likely to be considerably more
sensitive to current market conditions.
What next? QP also benefits from being one of the low-
Indeed, al-Kaabi’s comments on the shipbuild- est-cost producers of LNG, as well as being
ing deal this week serve to highlight how aggres- positioned within relatively easy reach of both
sively Qatar is pursuing its expansion plans. European and Asian markets. For US or Aus-
“The signing of today’s agreements with the tralian rivals, meanwhile, there are more risks
three esteemed Korean companies reflects our associated with costs and greater distances to
commitment to the North Field expansion pro- market. With this in mind, QP may see this as a
jects, even during these extraordinary times,” he good time to edge them out and gain additional
said. “As I have previously stated, we are moving market share. Its gamble, however, could prove
full steam ahead with the North Field expansion to be a costly one if lower LNG prices are here for
projects,” he continued. longer than previously expected.™

Week 22 04•June•2020 www. NEWSBASE .com P13