‘We cannot replace Russian gas’, says Qatar Emir

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Russian gas is essential to the global market and Qatar does not have the capacity to replace supplies to Europe with liquefied natural gas, the Gulf state’s Emir has said.

The European Union (EU) imposed sanctions on Russian oil imports in March in response to Moscow’s invasion of Ukraine, pledging to wean itself off Russian energy. 

The sanctions are intended to limit Russia’s financing ability for the war.

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Europe is facing an energy crisis of both supply and pricing, as Russia has indefinitely halted most gas flows to Europe in response to the sanctions. 

European prices have skyrocketed by nearly 400 percent since the war began owing to lower supplies from Russia and analysts have warned fuel will rise further as the impact of the conflict continues to be bite.

“We want to help Europe and we will supply gas to them in the coming years,” Sheikh Tamim bin Hamad Al-Thani, Emir of Qatar, told French Magazine Le Point in an interview republished on Wednesday by the state-owned Qatar News Agency. 

“But it is not true that we can replace Russian gas. Russian gas is essential to the global market.”

The Emir said Qatar, the world’s largest liquefied natural gas (LNG) producer, took the risk of investing in gas since the 1980s and 1990s because the Gulf state anticipated the importance of the energy source in the future.

“And a few years ago, we did it again by increasing our LNG production, although the global trend at the time was to get rid of these energies and focus on those that were then considered ‘clean’, like solar and wind,” he said

“But I can tell you that LNG is also clean energy. And gas is very important for the upcoming transition period. The war in Europe complicates the situation enormously, but the problem was there before.”

Qatar’s gas supplies have become crucial as Europe struggles to find a solution to reduce its reliance on Russian energy.

Historically, Doha’s biggest market for energy has been Asia but it also supplies to Europe through long-term agreements and on the spot market.

Russia supplied the EU with 40 percent of its natural gas in 2021. 

Germany, Europe’s largest economy, was the largest importer in 2021, followed by Italy.

“We must be careful about the types of sanctions that complicate things for the entire world,” Al-Thani said when asked if the Europeans were right to sanction Russian energy.

“In this case, I cannot judge whether Europe was right or wrong. But we can only observe the problems that the lack of energy is creating in Europe now.

“The most important point is that we are all suffering from the situation, whether it is in terms of energy or food. That is why the war in Ukraine must end. We have to find a solution.”

Al-Thani said gas, particularly LNG, will continue to play a key role in the global energy supply.

“It will be very important for the transition period, and in the longer term, in the energy mix,” he said. 

“And it is clean. For example, we have invested a lot in technologies that allow for the reduction of flaring and carbon capture.

“And let us not forget, we are talking about our problems, but there are a billion people on the planet who still do not have access to electricity.”

The Qatari ruler’s words come as the Kremlin on Wednesday played down the impact of lost gas sales to Europe, saying other buyers would be able to offset European demand.

“Europe is not the only consumer of natural gas and not the only continent that needs natural gas,” Kremlin spokesman Dmitry Peskov said in a Reuters report.

“There are regions developing at a much faster pace. They can compensate for the [reduced] demand for [Russian] gas in Europe,” he said.

Among countries benefiting from a drop in Russian energy exports to Europe are India and China, which are buying more, and cheaper, crude from Russia this year.

S&P Global Ratings reported yesterday that European energy markets are anticipating major policy changes by the first quarter of next year, with several reforms in discussion to address the energy crisis.

The agency said some of the options include decoupling gas and capping the price of EU gas imports or gas used for power generation.

“Last quarter – particularly the last three weeks of it – suggest that Europe’s power and gas exchanges are not functioning as intended,” Emmanuel Dubois-Pelerin, S&P Global Ratings’ sector lead for Europe, Middle East and Asia utilities, said. 

“We believe that the degree to which the EU and UK’s selected policy actions could help stabilise and increase the predictability of Europe’s power and gas markets, as well as utilities’ liquidity and overall credit quality, will depend on how quickly measures can be implemented and how they work together.”