Qatar warned that governments’ energy transition policies will discourage investment in fossil fuels and lead to natural gas shortages over the next decade, including in Europe.
“There will be a huge shortage of gas in the future, mainly because of the push for the energy transition which we would say is very aggressive,” Saad al-Kaabi, Qatar’s energy minister, told the Qatar Economic Forum in Doha. Tuesday. “Economic stability and environmental responsibility are not mutually exclusive. You have to have both.”
His comments were echoed at the same panel by his Saudi counterpart, Prince Abdulaziz bin Salman, who said policymakers in the UK and elsewhere had “blinkers”. They are too optimistic about how quickly oil and gas can be phased out and replaced by cleaner, renewable energy, he said.
Gas prices have fallen this year and in Europe are less than a tenth of their peak last year, when the continent was rocked by Russia’s invasion of Ukraine and the decision to cut off supplies to nations such as Germany.
Much of the price drop was down to a warm winter in the northern hemisphere and weak growth in China while under strict Covid-19 lockdowns.
“The only thing that saved humanity and Europe this year was a warm winter and the worldwide economic slowdown,” al-Kaabi said. “If the economy bounces back in 2024, the worst is yet to come.”
Demand from the northern field
Qatar is one of the world’s largest producers of liquefied natural gas. Unlike many other gas-rich nations, it is investing tens of billions of dollars to increase its capacity to 126 million tonnes a year by 2027, from about 77 million.
Demand for gas from the expansion projects, called North Field East and North Field South, is “very large,” al-Kaabi said. “We’re lining up people to negotiate. We’re very busy.”
The country in November signed a historic $60 billion deal to supply China Sinopec with LNG from projects starting in 2026. It has also signed a deal to send shipments to Germany, although no contracts have yet been agreed for most of the additional gas.
Qatar may look to increase its capacity beyond 126 million tonnes per year, but has yet to make a decision.
“When the time is right and we can technically do it, we will definitely do more,” the minister said.
The Government of the State of Qatar is a subscriber to the Qatar Economic Forum, powered by Bloomberg.
