One of the world’s largest liquefied natural gas exporters, Qatar, can divert only 10-15 percent of its LNG cargo contracts to other destinations, Qatari Energy Minister Saad al-Kaabi said on Tuesday amid the escalation of the Russia-Ukraine crisis, adding that replacing Russian gas deliveries to Europe in the short term is “almost impossible.”
The energy markets reacted on Tuesday after Russian President Vladimir Putin recognized two breakaway regions in eastern Ukraine and ordered troops in them, with oil prices soaring close to $100 a barrel and European gas prices jumping by double digits, also in view of the news that Germany halts the Russia-led Nord Stream 2 gas pipeline project.
“Russia (provides) I think 30-40% of the supply to Europe. There is no single country that can replace that kind of volume, there isn’t the capacity to do that from LNG,” al-Kaabi said at a gas conference in Doha on Tuesday, as carried by Reuters.
“Most of the LNG are tied to long-term contracts and destinations that are very clear. So, to replace that sum of volume that quickly is almost impossible,” the minister noted.
In Qatar’s case, only up to 15 percent of LNG contracts are divertible, he added.
For several weeks now, as the Russia-Ukraine crisis was brewing, the United States and Europe have been talking with energy companies and major gas-producing countries globally about the potential for a large supply of natural gas to Europe in case Russian deliveries are interrupted.
Talks have even reportedly involved major LNG importers in Asia—including Japan, South Korea, India, and even China—to potentially send some of their gas supply to Europe in case the Russia-Ukraine crisis escalates into a conflict.
In light of the latest escalation, the EU, the UK, and the U.S. are preparing sanctions against Russia, which are expected to be announced as soon as today and could affect Russian energy exports.
By Tsvetana Paraskova for Oilprice.com
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