Qatari Energy Minister: European Moves to Cap Gas Prices Are ‘Hypocritical’ to Bloc’s Past Rules
A controller at a pipe for gas lines is pictured at Open Grid Europe (OGE), one of Europe’s largest gas transmission system operators, in Werne, western German on March 24, 2022
Qatar withdrew from OPEC in 2019 following a diplomatic schism with its neighboring countries, and has said they are not planning on returning to the organization. Attempts by the EU to secure more gas from Qatar have been unsuccessful, as the Middle Eastern nation has been producing more than its capacity for a long time. Qatari Energy Minister Saad al Kaabi recently blasted European proposals to set limits on the price of natural gas as being “hypocritical” as such efforts would contradict the bloc’s previous rules on producers.According to reports, the European commission aims to propose a cap on gas prices, utilizing a “dynamic” price mechanism that could be in place as soon as this winter in an effort to combat fuel prices.The capping of prices reduces the investment incentives for gas production and may debris some buyers of needed supplies – sending potential buyers to rival importers. “The free market is always the best solution,” he said Sunday during an appearance on Bloomberg TV.This week, EU officials visited Qatar to negotiate supplying gas to Europe during its energy crisis.The bloc aims to lessen its consumption of Russian natural gas, working towards a break from its biggest energy supplier amid the ongoing special military operation in Ukraine. Part of the plan requires finding supplies like natural gas, renewable hydrogen and biomethane elsewhere.Since the February start of Russia’s ongoing operations, Qatar agreed to refrain from diverting shipments away from Europe, and according to Kaabi, plan to stick to the statement with the reminder that “nothing is permanent and we have the right to do what we like with our volumes.”“But it was a promise that we made for a certain duration. When it’s appropriate for us to divert, we will,” he noted.Currently, only 20% of Qatar’s gas goes west of the Suez canal, and by 2028 the country hopes to level out its gas volumes until it’s equally split between consumers east and west — with eyes on becoming the world’s largest liquid gas trader.“We have not agreed a long term agreement with Germany yet, but we’re willing to discuss with the companies that we have been discussing to put a long term agreement in place potentially,” Kaabi said.The European Commission closed its 4-year antitrust investigation into Qatar’s deals to supply liquid natural gas to European companies in March. The probe addressed concerns about the producer’s supply agreements restricting the ability of EU gas importers to sell liquified natural gas in other pockets of the bloc’s internal market.“We’re not going to divert [contracts] and will keep them in Europe, even if there is financial gain for us to divert away, we would not do that,” said Kaabi, who is also president and CEO of QatarEnergy. “That’s in solidarity with what’s going on in Europe.”The minister has also rejected imposing sanctions on Russia’s oil and gas sector, with the opinion that “energy should stay out of politics,” before pointing out that ceasing Russian gas supply to Europe is “not practically possible.”
