SINGAPORE: The diplomatic crisis between Qatar, the world’s largest producer of liquefied natural gas (LNG), and some of its neighbours is unlikely to put a dent in the supply of LNG here, industry observers say. About 30 per cent of Singapore’s LNG imports come from Qatar. Several nations, including Saudi Arabia, Egypt and the United Arab Emirates (UAE), have cut ties with the tiny Gulf state over, what they say, is Qatar’s support for terrorism. Qatar rejects the accusation.
The growing rift among the Gulf states has stoked fears over global access to Qatar’s LNG supply. But Mr Karthik Sathyamoorthy, president of global energy advisory firm Galway Group, told The Straits Times (ST): “I don’t see any impact on the LNG supply from Qatar to Singapore because the regional conflict doesn’t affect the LNG shipping movements out of Qatar, and the Qataris have already given their assurance to their LNG buyers about supply commitments.”
Also, Singapore is not buying LNG directly from Qatar but from oil and gas giant Shell, which gets LNG from various sources, including Qatar, he said. Mr Peter Lee, oil and gas analyst at BMI Research, also does not expect the crisis to have a material impact on LNG supplies here, as Qatari LNG cargoes can still be exported via the Strait of Hormuz. “We expect Qatari LNG to remain competitive versus supplies from elsewhere,” Mr Lee added. He noted that most of the LNG imported into Singapore is consumed by the power sector for electricity generation. About 95 per cent of Singapore’s electricity is generated using natural gas. Shell Gas Marketing holds the licence to import and sell LNG, possibly until 2023. It will be joined by Pavilion Energy and Shell – appointed to supply Singapore’s next tranche of LNG starting this year.
Trade and Industry (Industry) Minister S. Iswaran has said the new tranche of LNG will come from the United States, Australia, Norway, Russia, Brunei and Qatar. A spokesman for Pavilion said the firm does not have any contract with Qatargas for the supply of LNG from Qatar. A Shell Spokesman said: “Currently we are focused on running our Qatar business as usual and are not experiencing any operational disruption as a result of the current situation. We have no further comment at this time.”
