Qatar: Natural Gas Markets Will Remain Volatile for Years

Natural Gas Markets are Expected To Be Volatile In the Coming Years As Demand Continues To Outpace Supply, According To Qatar's Energy Minister.

‍
Saad al-Kaabi warned that the global gas market is likely to remain volatile in the near future. "We're bringing a lot of gas to the market, but it's not enough," he said at an Atlantic Council conference in Abu Dhabi.

‍
Next winter may be tough for gas consumers in the northern hemisphere, as they will probably struggle to replenish their stockpiles before then in the absence of flows from Russia. This could lead to higher prices and supply disruptions.

‍
After Russia invaded Ukraine last February, gas prices soared as Moscow cut piped supplies to Europe. However, prices have slumped since the middle of 2022, due to slower economic growth and increased imports of liquefied natural gas from Qatar and other countries. A warmer-than-normal winter in Europe has also helped to lower gas prices.

‍
But gas prices remain far above historical averages and could jump again if China’s economic re-opening leads to increased gas purchases. Europe may also have to fill up its reserves over the summer with barely any flows from Russia, its biggest supplier before the Ukraine war.
Al-Kaabi said that high prices are hurting consumers.

‍
"The biggest challenge we face as producers is demand destruction," he said. "There is demand destruction for both gas and oil."
Qatar is investing around $45 billion to increase its production of LNG by almost 60%. However, this project will not be completed until 2027. Qatar is currently the world's second-largest exporter of LNG, behind only the United States.

‍
Qatar and Germany have reached a long-term gas deal that will see Qatar supplying Germany with LNG. This is a significant deal for both countries, as it will help to secure energy supplies for Germany and provide a boost to Qatar's economy. Al-Kaabi said that Qatar will sign more deals this year with consumers for the new gas. In November, Qatar made multi-year agreements to supply some of the gas to Germany and China.

‍
Qatar will also sign so-called off-take deals for its LNG assets in the US in 2023, the country's energy minister said. Qatar owns 70% of the Golden Pass export terminal in Sabine Pass, Texas.