‘Qatar hits a nerve’, but no immediate shortage of liquid gas in Europe

Qatar’s energy minister yesterday threatened to stop deliveries of liquefied gas (LNG) to the EU. He did this in response to a new European law that requires companies to take into account abuses such as environmental pollution and exploitation. Qatar’s attitude could have a bad effect on the European Union, because the country supplies part of the gas that we rely on in the winter to heat houses, for example.

Yet the threat has no immediate consequences for the residents of Europe, several energy experts told Autovantra. In the long term, Qatar could decide not to renew contracts for the purchase of LNG, but the minister’s words are now mainly a signal to Europe.

European countries import the raw material from all over the world, such as the United States, African countries such as Algeria and even some from Russia. In addition to Qatar, gas also comes from other countries in the Middle East, such as Oman.

We must take the Qatari minister’s threat seriously, say the experts. Qatar is one of the largest suppliers of LNG worldwide. European countries, including the Netherlands, cannot simply do without it. Many industries and households are still dependent on gas.

“What else do we want in the EU than LNG?” asks Jilles van den Beukel, affiliated with the Hague Center for Strategic Studies (HCSS), in the Autovantra Radio 1 News. “LNG has become increasingly important for Europe now that Russian gas has disappeared. Qatar is the EU’s second supplier, after the US. The problem for the EU is: we have no leg to stand on when it comes to the gas situation.”

There is also a downside for Qatar, says René Peters, energy specialist at research agency TNO. The country is largely economically dependent on the export of fossil fuels. If there are no more sales going to Europe, more sales will have to be made in Asia, for example. America also wants to sell more gas to the EU. “We are not yet stuck because of Qatar,” says Peters.

Van den Beukel: “It is trade that they will not simply stop, the EU is too important for that. They mainly want to make a point. In Qatar they are sensitive to raised fingers from the European Union.”

The financial markets are hardly reacting to Qatar’s threat: the purchasing price on the gas market has not increased enormously or is higher than on other days. This is because LNG contracts are concluded for the long term: a period of twenty years or longer.