Qatar has proposed a gas pipeline from the Gulf to Turkey in a sign the emirate is considering a further expansion of exports.
Qatar seeks gas pipeline to Turkey
Qatar has proposed a gas pipeline from the Gulf to Turkey in a sign the emirate is considering a further expansion of exports from the world's biggest gasfield after it finishes an ambitious programme to more than double its capacity to produce liquefied natural gas (LNG).
"We are eager to have a gas pipeline from Qatar to Turkey," Sheikh Hamad bin Khalifa Al Thani, the ruler of Qatar, said last week, following talks with the Turkish president Abdullah Gul and the prime minister Recep Tayyip Erdogan in the western Turkish resort town of Bodrum. "We discussed this matter in the framework of co-operation in the field of energy. In this regard, a working group will be set up that will come up with concrete results in the shortest possible time," he said, according to Turkey's Anatolia news agency.
Other reports in the Turkish press said the two states were exploring the possibility of Qatar supplying gas to the strategic Nabucco pipeline project, which would transport Central Asian and Middle Eastern gas to Europe, bypassing Russia. A Qatar-to-Turkey pipeline might hook up with Nabucco at its proposed starting point in eastern Turkey. Last month, Mr Erdogan and the prime ministers of four European countries signed a transit agreement for Nabucco, clearing the way for a final investment decision next year on the EU-backed project to reduce European dependence on Russian gas.
But Nabucco's future is far from assured, as its proponents have yet to reach agreements with gas suppliers. The project was originally conceived as a conduit for Central Asian gas, but recently its backers have been courting Middle Eastern producers as well. After his meeting with Sheikh Hamad last week, Mr Erdogan said Turkey wanted a "long-term and stable relationship" with Qatar in energy matters.
"For this aim, I think a gas pipeline between Turkey and Qatar would solve the issue once and for all," Mr Erdogan added, according to reports in several newspapers. The reports said two different routes for such a pipeline were possible. One would lead from Qatar through Saudi Arabia, Kuwait and Iraq to Turkey. The other would go through Saudi Arabia, Jordan, Syria and on to Turkey. It was not clear whether the second option would be connected to the Pan-Arab pipeline, carrying Egyptian gas through Jordan to Syria. That pipeline, which is due to be extended to Turkey, has also been proposed as a source of gas for Nabucco.
Based on production from the massive North Field in the Gulf, Qatar has established a commanding position as the world's leading LNG exporter. It is consolidating that through a construction programme aimed at increasing its annual LNG production capacity to 77 million tonnes by the end of next year, from 31 million tonnes last year. However, in 2005, the emirate placed a moratorium on plans for further development of the North Field in order to conduct a reservoir study. It recently extended the ban for two years to 2013.
But now there are signs that Qatar's government is looking beyond the moratorium to what it will do next with massive gas reserves that, at about 900 trillion cubic feet, are the world's third-largest. Last week, Saad al Kaabi, the director of oil and gas projects for the government-owned Qatar Petroleum, said Qatar could produce 23 billion cubic feet per day (cfd) of gas by 2014. That would be more than triple the emirate's output last year of 7.4 billion cfd, and 64 per cent more than its estimated 14 billion cfd of potential production once the LNG expansion programme is completed.
Abdullah al Attiyah, the Qatari deputy prime minister and energy minister, has expressed concerns about flooding an already glutted international LNG market. Exporting gas by pipeline, which is cheaper than cooling it to liquid form for shipment in specialised tankers, might be an attractive alternative. But cross-border pipeline projects more often than not face substantial political hurdles, as Nabucco's proponents have discovered.
The main sticking point for a Qatar-to-Turkey pipeline could be a transit agreement with Saudi Arabia, which has a track record of obstructing regional pipeline projects and for decades has had a tense political relationship with Qatar. "There would have to be some evidence of political will from the Kingdom of Saudi Arabia for the investment community to take this proposal seriously," said Douglas Caskie, the manager of the Abu Dhabi office of the consulting firm IPA Energy and Water Economics.
Saudi opposition derailed plans for a gas pipeline from Qatar to Kuwait. The kingdom also objected unsuccessfully to the construction of an undersea pipeline that now carries Qatari gas to the UAE and to a continuing UAE project to build an oil pipeline from Abu Dhabi to Fujairah. Turkey, which does not have major energy resources, is as mindful as EU countries of a dependence on Russian gas, and has been seeking a deal to import LNG from Qatar. It has also been trying to make the most of its geostrategic position between energy-rich regions like Russia, Central Asia and the Middle East, and the European market. Shortly after signing the inter-governmental agreement to set up Nabucco, Mr Erdogan signed a deal with Russia for the South Stream project to send Russian natural gas under the Black Sea to Bulgaria.
With a possible new pipeline project involving Qatar, "Turkey's hand in the energy game will be strengthened considerably", the Vatan newspaper commented. email@example.com Gorgon gas closer to market, b9