Qatargas mulls diversion of LNG amid UK slowdown

GAS MOVE: Qatar's supply of LNG to the UK could be diverted elsewhere amid oversupply and poor demand concerns. (Getty Images)

Qatargas is considering diverting liquefied natural gas (LNG) intended for Britain to other countries due to oversupply and poor demand in the UK, its chief executive has said.

"The UK market is now saturated and we believe it will remain so in the short term," Faisal al-Suwaidi told Gulf Times on Wednesday. "So we need to divert cargoes to markets which can absorb these."

He said Asia was a potential market that could absorb the cargoes.

Spot LNG demand in Asia was cool earlier this year due to the recession, but it has been showing signs of life with India picking up some of the surplus supply.

Suwaidi said that, despite the short-term dip in demand, the long-term outlook for the British market was healthy.

"We will emerge as one of the main suppliers to the UK in the longer term," he said.

"Qatar's commitment to the UK market is total...We have invested $2 billion at the South Hook regasification terminal in Wales. Who will do this? Only those with total commitment to the market can think of this."

Suwaidi said Qatargas is pushing back the start-up of the train 6 and train 7 production units at its LNG plant in Qatar to 2010, and he gave a more precise timetable than he has previously revealed.

"We are delaying the start of new production units to ensure they are technically sound," he said.

Train 5 is expected to start up by the end of the year, while train 6 is to be brought online in the second quarter of 2010 and train 7 is scheduled to come online by the end of that year, Suwaidi said in the report.

He said Qatargas would also commission its 144,000 bpd gas condensate refinery, which was due to start up in July.

Qatargas is one of two majority-state owned producers in the world's top LNG exporter. The Gulf Arab state of Qatar has the world's third-largest gas reserves.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM