Qatargas CEO: New LNG Markets Emerge, Balance Demand Drop
07 October 2009 - 1:39AM
Dow Jones News
New markets for liquified natural gas have emerged as
traditional outlets continue to be affected by the global economic
downturn, the chairman and chief executive officer of Qatargas
Operating Co. Ltd. said Tuesday.
"LNG is finding a home for anyone who is producing" Qatargas'
Faisal Al-Suwaidi said on the sidelines of the World Gas
Conference.
"Traditional markets are seeing a drop in demand, but new
markets such as China and India are putting things in balance,"
Al-Suwaidi said.
Al-Suwaidi said large-scale LNG producers needed to take a
long-term view at current prices, which fell along with crude oil
prices over the past year in response to the financial crisis and
economic slowdown.
"My view here is that this is a long-term business. Prices will
come down, prices will go up," Al-Suwaidi said. "We need to accept
that over the next 30 to 40 years that prices will fluctuate."
Qatargas' focus on big production trains and large LNG carriers
allows the company to expand its market possibilities, shipping
from the Middle East to such far away markets as the U.K., U.S. and
Mexico, the executive said. In addition, operating at scale reduces
unit costs.
The very nature of the LNG market also allows for sufficient
flexibility that cargos can be shifted to meet demand.
"In theory, the entire quantity of the liquid market can be
diverted, but with limitations," Al-Suwaidi said. For example,
different seasonal factors in the U.S. and Europe could lead to
diversion of cargos between the two markets, he said.
-By Jeff Fick, Dow Jones Newswires; 55-21-7564-4503;
jeff.fick@dowjones.com