A Passage East: Taking LNG Investment To The Next LevelAdd bookmark
As the global market for liquefied natural gas (LNG) continues to expand, many countries are jumping on what is fast becoming a very fast moving bandwagon.
One of these is India, which has recently expressed its interest in purchasing a further 15 million tonnes of liquefied natural gas from Qatar.
The country already imports 7.5 million tonnes from Qatar but is aiming to boost the market and highlight its desire to become a major player in the industry, according to the Indian ambassador to Qatar Deepa Gopalan Wadhwa.
In an interview with the Qatar Tribune, she revealed that India purchased four million tonnes of oil from Qatar in 2010 and has now become the largest buyer of LNG from the state, far ahead of other importers such as Japan and China.
Conversely, Qatar admitted that it is willing to increase supply of LNG to meet India's requirements, while Qatari minister of state for international cooperation Khalid bin Mohammed al Attiyah said that Qatar would facilitate the participation of Indian companies in the oil and gas industry.
It stems from the setting up of the India-Qatar High Level Monitoring Mechanism (HLMM) in November 2008, co-chaired by Mr Al Attiyah and principal secretary to the Indian prime minister TKA Nair.
At the most recent meeting, India reaffirmed its commitment to demanding Qatar's LNG exports and formally put forward the request for 15 million tonnes of LNG.
Ms Wadhwa told the news provider that cooperation in the power sector was also discussed by the two sides at the latest meeting, noting how India is a "very large natural market" in close proximity to Qatar.
"India offers opportunities for two-way investment: Qatari investment in India is mainly in the infrastructure sector and private Indian companies are looking for investment in Qatar," she noted.
In addition, with Qatar being named host of the 2022 World Cup recently, huge investment in infrastructure is likely, and Indian companies with a global profile are planning to secure lucrative engineering, procurement and construction management contracts.
It was only in November 2009 that Qatar and India signed a memorandum of understanding about a possible $5 billion (£3.1 billion) Qatari investment in India.
"India has to show them different projects or areas of investment. Since India is surging in different sectors and so is Qatar, such links will be a win-win situation for both sides," Ms Wadhwa explained.
She also highlighted how the announcement that India is seeking to buy 15 million tonnes of LNG from Qatar "puts to rest" speculation in the media and other unofficial circles about whether the country is contemplating the purchase of either five or ten million tonnes of LNG from the state.
Meanwhile, Qatargas has also signed long-term contracts to supply a total of five million tonnes a year of LNG to China, including executing a 25-year LNG sales and purchase agreement in 2008 with CNOOC to supply two mtpa of LNG to China.
Recently, Qatar also began talks with China Petroleum and Chemical Corp, known as Sinopec, over the supply of natural gas.
The volumes being discussed would be additional to the annual supply of 12 million metric tonnes of LNG that Qatar has committed to Sinopec's domestic rivals PetroChina Co and China National Offshore Oil Corp.
Currently, Qatar is the world's largest LNG producer and anticipates that India and China will become two of the world's biggest gas markets following the deals that have been made, with Japan in third place.
The source noted that Asian markets have been benefitting ever since the US, currently the largest erstwhile gas market, began experiencing a "gas glut" due to the use of other kinds of alternative fuels.
Qatar therefore began diverting its LNG supplies to the Asian markets, including China and Japan, and it appears that these areas will be the ones where the LNG sector truly begins to prosper in the months and years ahead.