The Qatar is already an important energy partner for Italy and Europe, and its contribution to gas supplies through the LNG will increase further in the coming years. However, the scandal involving some deputies of the European Parliament accused of influencing the work of the institutions thanks to bribes paid precisely by Qatar threatens to undermine this relationship. The situation puts Italy and Europe in a position of blackmailing against Qatar, considered a vital supplier to replace Russian gas. Qatar is in fact the world’s leading exporter of LNG, liquefied natural gas, on which Italy and other European countries are focusing to diversify the sources of supply through regasification terminals. As happened in the recent past with Russia, now Qatar too can keep its customers in check.
Qatar is the Saudi Arabia of LNG
According to many energy experts, Qatar is becoming the Saudi Arabia of gas, an essential supplier thanks to its vast reserves and the very low cost of the contracts offered. The lack of Russian gas on the European market makes Qatar an obligatory interlocutor in the process of differentiating supplies.
Qatar has been exporting liquefied natural gas to Asian countries for years, but is now ready to take advantage of Russia’s absence to become the market leader in Europe, and beyond: Qatar is also getting closer to China, competing Russia that wants to divert gas to Asia that Europe no longer buys.
The gas pact between China and Qatar worries Europe
In 2021, Qatar has started construction of four new gigantic production and export terminals, with the aim of increasing export capacity by more than a third by 2026. At present, Qatar is already the largest exporting country of LNG.
Overall, Qatar’s capacity to produce liquefied natural gas will grow by more than 60 percent, reaching 126 million tons per year over the decade. The country’s energy exports, of which natural gas is by far the most important, doubled this summer from last year to $9.2 billion in August.
The importance of LNG and business with Italy
LNG is playing a primary role in replacing the volumes of gas that no longer arrive from Russia, and its contribution will grow further over time. Italy and Europe have bet heavily on liquefied natural gas in the new supply diversification strategy: in 2021 Italy and the European Union depended for over 40 percent on Russian gas. Now the European states are equipping themselves by building regasification plants to receive the liquefied natural gas and increase its supplies.
Will the gas from the new regasification terminals in Piombino and Ravenna be enough?
Since the beginning of the war, dependence on Russia has collapsed: we have gone from over 40 percent dependency in 2021 to 3 percent in November 2022. In absolute values we are talking about tens of billions of cubic meters of gas less, even if Russian imports have resumed in recent weeksbut at levels not comparable to those of 2021. At the same time, the weight of LNG in the Italian supply economy has grown, reaching 28 percent of the total in November 2022.
Click here to see the graph with the countries supplying gas to Italy in 2022
In addition to operating its large national offshore gas field, the state-owned Qatar Energy is expanding worldwide with investments in Brazil, Suriname, Angola, South Africa and elsewhere. He also negotiated a 15-year deal to supply Germany with gas, but from 2026.
In less than 200 days, Germany built its first liquefied gas terminal
Last June Eni was selected by QatarEnergy as a new international partner for the expansion of the project North Field East. The agreement was signed on 19 June: QatarEnergy will hold a 75 percent stake, while Eni the remaining 25 percent. With an investment of 28.75 billion dollars, the North Field East it is expected to go into production by the end of 2025 and will employ state-of-the-art technologies and processes to minimize environmental impact, including carbon dioxide capture and storage.
The problems of LNG: the “black” year
Several analysts consider 2023 to be the black year for LNG, and recent tensions with Qatar make matters worse. After Qatargate, defined as the most serious corruption scandal in the history of the European Parliament, the countermeasures adopted by Brussels have angered the Qataris.
In a statement, a Qatari diplomat warned that “the decision to impose such a discriminatory restriction on Qatar, limiting dialogue and cooperation before the end of the judicial process, will have an adverse effect on regional and global security cooperation, as well as ongoing discussions on global energy scarcity and security”.
Why the European Parliament is so important to Qatar
The problem of scarcity on the market with respect to demand also applies to LNG: the lower Chinese imports of liquefied natural gas in the first ten months of 2022 have increased availability for the European market, which needs to replace the lost volumes from Russia, but how hypothesizes in two analyzes made by Standard & Poors and the International Energy Agency (IEA), if Chinese LNG imports resumed next year at the pace of 2021, more than 85 percent of the global supply of liquefied natural gas that would wait longer. And global supply is expected to increase by only 20 billion cubic meters next year.
In addition, the recent statements by Qatar increase concerns in view of 2023. At the moment, the lower gas consumption of Italians compared to 2022 is removing the risk of rationing for the current winter season, but by now it is clear that the problems could have only been postponed to next springwhen the stocks will have to be filled again.