Page 11 - AsianOil Week 20 2021

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

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