Qatar Willing To Sell More LNG To EU Under Certain Circumstances

One of the world's largest LNG exporters, Qatar, wants the European Union to restrict the resale of gas cargoes outside the EU if Qatar agrees to divert emergency supply to Europe in case of a Russian invasion of Ukraine, Reuters reported on Monday, citing a source briefed on the discussions.

The EU and the United States are looking to secure from major gas-producing countries and major energy companies additional LNG supply that would go to Europe if Russian deliveries are disrupted or interrupted in case of a conflict with Ukraine.

The U.S. Administration is in talks with energy companies and major gas-producing countries, including Norway and Qatar, about the potential for a large supply of gas to Europe.

Last week, Press Secretary Psaki said that the United States had been working to identify additional volumes of non-Russian natural gas from North Africa and the Middle East, Asia, and the United States. 

"We're in discussion with major natural gas producers around the globe to understand their capacity and willingness to temporarily surge natural gas output and to allocate these volumes to European buyers," Psaki added.

Qatar, however, is seeking guarantees that cargoes would not be resold outside the EU on the spot market later, and is also asking the European Commission to resolve a probe from 2018 into Qatar's long-term supply contracts, according to the Reuters source.

"Qatar's supply wouldn't be conditional on requests. But the issues need to be dealt with to ensure long-term and short-term solutions for Europe's LNG crisis," the source told Reuters.

Qatar reportedly lacks much spare LNG cargoes, but it could divert some tankers away from Asia and into Europe, Reuters notes.

Another top LNG exporter, Australia, said last week it was ready to ship LNG cargoes to Europe to "support its friends and allies," as the U.S. is looking to raise alternative gas supply.

Meanwhile, Europe's gas storage levels dropped to below 40 percent—gas storage sites across Europe are 38.99 percent full—a historically low level, data from Gas Infrastructure Europe showed. This is 15.6 percentage points below the five-year average for this time of the year.

By Charles Kennedy for Oilprice.com

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