In talks with giants over petrochemical plant DOHA: Gas-rich Qatar Tuesday renewed calls by exporters of natural gas for a mechanism to link pricing for the commodity to oil prices to ensure stability in the market. “This is the best way (for) stability to be brought back into the market,” said Qatari Energy Minister Abdullah Bin Hamad Al-Attiyah. “If there were to be an agreement on gas pricing, the market would be open to everyone,” he told reporters on the sidelines of a gas forum in Doha. “There would be a guaranteed supply, instead of having exporters switching destinations of their exports depending on (offered) prices,” Sheikh Abdullah added. Gas prices are determined either in long-term contracts between seller and buyer or on spot markets. But the energy chief of Qatar, which sits on the world's third largest reserves of natural gas, brushed aside questions on calls to form a cartel of gas exporters like OPEC which influences prices by setting quota allocations. “No cartel,” he said in a curt response. Qatar is home to the Gas Exporting Countries Forum, whose members control 69 percent of proven global natural gas reserves. The idea of a “gas OPEC” gained momentum in 2006 after Europe's main suppliers, Russia's Gazprom and Algeria's Sonatrach, signed a partnership accord. But the idea which alarmed consumer countries in Europe soon lost steam as gas exporters did not appear keen on production quotas. At the forum, Attiyah advocated switching to natural gas as an ideal energy source that reduces carbon emissions. “Given the many advantages of natural gas over other fossil fuels that emit more carbon dioxide per unit of energy consumed, switching to natural gas seems to be a sensible approach that can mitigate the effect of greenhouse gases,” he said, kicking off the one-day forum. Attiyah also told participants that natural gas saw the largest drop in consumption last year in the primary energy mix. World gas demand dropped by 2.1 percent in 2009 due to the global economic recession, according to a paper produced by the International Energy Forum (IEF) and International Gas Union (IGU), the joint organisers of the forum. It said that demand declined in Organization for Economic Cooperation and Development countries by 3.1 percent, with Europe most affected, as well as non-OECD Russia where demand dropped by as much as 6.1 percent. But demand in robust China and India surged by a respective 9.4 percent and 25.9 percent in the same period, as the Middle East also saw a growth in demand of 4.4 percent, it added. An oversupply of natural gas, or a “gas glut,” is what currently irks exporters, as increased liquefaction capacity and a rise in the supply of the US unconventional shale gas faced low demand over the past two years. “A surge in volumes coupled to a weak demand resulted in a global gas over supply,” the IEF-IGU said in a paper at the forum. Attiyah, whose country is now the world's largest exporter of liquefied natural gas, sounded unfazed by the competition to LNG from shale gas, saying on the contrary that it supports gas as an adequate source for energy. “In the past there was a fear that gas was not enough ... now we can confirm that there is enough gas,” he told reporters. Qatar is in talks with petrochemical companies, including Total and Shell, for a multi-billion-dollar plant reportedly abandoned by ExxonMobil, Qatar's energy minister said Tuesday. “It is still under discussion,” Al-Attiyah told journalists when asked about reports that French Total was taking over the plant project that ExxonMobil is said to have quit. Asked whether the talks involve oil giants Total and Royal Dutch Shell, Attiyah said “we are discussing with several ...(parties) and we will take the best offer.” Attiyah's statement appeared to confirm that ExxonMobil has walked away from the project over which it has signed heads of agreement in January 2010. A spokesman for Total Petrochemicals was cited last week by Dow Jones newswire as saying that talks between government-owned Qatar Petroleum and the French company over the mixed-feed cracker were still in the early stages. ExxonMobil has not confirmed quitting the project. The value of the project in Ras Laffan was estimated at around six billion dollars, but Attiyah said he could not at the moment confirm the figure, saying a more reliable value would be disclosed after reaching a deal. “This is not my estimate... After approval I can give actual value,” he said. In May, Attiyah said Qatar plans to boost its annual petrochemicals production to 28 million tons by 2014. Qatar holds the world's third-largest natural gas reserves, estimated at more than 900 trillion cubic feet (25 trillion cubic meters), after Russia and Iran. Qatar also produces some 800,000 barrels of crude oil per day. – Agence France
