Posts Tagged ‘liquefied natural gas’

Japan, Russia Need to Enhance Trust Before Gas Pipeline Plans: Minister

August 7, 2017

TOKYO — Japan and Russia need to work on building a more trusting relationship before any plans to build a natural gas pipeline between the two nations can be fulfilled, Japan’s Minister for Economy, Trade and Industry Hiroshige Seko said on Monday.

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Building a pipeline linking Russia and Japan is a long-standing idea, but a dispute over islands seized by Russia near the northern Japanese island of Hokkaido at the end of the World War Two has kept relations testy at times.

Japanese gas and electric utilities that have invested heavily in import terminals for liquefied natural gas (LNG) may also be reluctant to invest in a pipeline.

“Without a sense of further sense of trust such as a peace treaty, a pipeline would be no good,” Seko said during a speech in Tokyo while answering a question about Japan’s energy relationship with Russia.

Japan imports nearly all of its energy sources and is the world’s biggest buyer of LNG, which is natural gas cooled until it becomes a liquid and then transported on ships.

Japan’s Prime Minister Shinzo Abe said in April that Japan wants to resolve a territorial row that has over-shadowed ties with Russia since World War Two.

The islands were seized by Soviet forces at the end of the war and 17,000 Japanese residents were forced to flee.

Despite the lingering dispute, Seko said that Japan imports around 10 percent of its LNG from Russia and the country could increase its reliance on Russia’s LNG a little bit more.

(Reporting by Yoshifumi Takemoto; Writing by Osamu Tsukimori; Editing by Aaron Sheldrick and Christian Schmollinger)

Pakistani lawmakers elect ousted PM Nawaz Sharif’s ally as replacement

August 1, 2017


By Asif Shahzad and Drazen Jorgic

AUGUST 1, 2017 / 3:08 AM

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Shahid Khaqan Abbasi

ISLAMABAD (Reuters) – Pakistani lawmakers on Tuesday elected former petroleum minister Shahid Khaqan Abbasi, an ally of ousted leader Nawaz Sharif, to replace him and the new premier immediately sought to project an image of stability.

Lawmakers of the ruling Pakistan Muslim League (Nawaz) party banged on benches and chanted “Lion, lion Nawaz Sharif” after the vote, standing defiant in the wake of the Supreme Court’s decision to cut short his third stint in power.

A quick transition may ease fears that the nuclear-armed nation will be plunged into another bout of political turmoil, which could erode economic and security gains since the last poll in 2013.

Sharif resigned on Friday after the Supreme Court disqualified him for not declaring a source of income – which the three-time premier disputes receiving. He nominated staunch ally Abbasi as interim leader until his brother, Shahbaz, becomes eligible to take over, probably within two months.

Abbasi was confirmed with 221 votes in the 342-seat National Assembly as the PML-N used its hefty majority to push through his appointment. PML-N officials hugged each other and congratulated Abbasi even before the result was announced.

“Within four days the process of democracy is back on track,” Abbasi told lawmakers after being voted in. “Above all, I’m thankful to Muhammad Nawaz Sharif, the people’s prime minister.”

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Pakistan’s ousted prime minister Nawaz Sharif (R) and his brother Shahbaz. AFP photo

PML-N officials have privately spoken of plans for Sharif to wield huge influence in the party from behind the scenes.

“The prime objective is to give Pakistan stability,” said Rana Muhammad Afzal Khan, a PML-N lawmaker in the national assembly. “As a responsible party we have to take Pakistan ahead.”

But the plan to eventually install Shahbaz has also sparked anger among supporters of opposition leader Imran Khan, who has criticized another bout of dynastic politics, a trend with a long history in Pakistan and elsewhere in South Asia.

Khan, who agitated with street protests until the Supreme Court took up a corruption case against Sharif, has called the family a “monarchy” and accused it of trying to turn the country into a personal fiefdom.

Shahbaz, now chief minister of eastern Punjab province that is home to more than half of Pakistan’s 190 million people, will have to resign and fight a parliamentary by-election before he can take over as prime minister.

Aides say he is likely to favor a new personal style of government, while probably continuing his brother’s focus on huge infrastructure projects and policies favoring business.

Interim Leader

Western-educated Abbasi, who started his career as a businessman, has spent most of his political life by Sharif’s side. He was jailed after Pakistan’s powerful military staged a coup in 1999 to topple a previous Sharif government.

As minister of petroleum and natural resources in Sharif’s last cabinet, he championed a push to build liquefied natural gas (LNG) infrastructure and alleviate energy shortages.

The effort has attracted foreign companies, who now see Pakistan as one of the world’s fastest-growing markets. Growth will increase fivefold, Abbasi told Reuters last month.

The opposition has also accused Abbasi of corruption over the bidding for an LNG deal in southern Karachi, citing a National Accountability Bureau (NAB) inquiry case filed in 2015 that alleges procurement irregularities.

The NAB case has made little progress and Abbasi has denied wrongdoing, with PML-N allies saying the opposition wants to detract from the success of the LNG effort.

In Pakistan’s rough-and-tumble politics, charges of corruption against leading politicians are common and several figures, including opposition leader Khan, face court cases.

Besides ordering Sharif’s removal, the Supreme Court also ordered a criminal investigation into him and his family, as well as Finance Minister Ishaq Dar.

How Energy-Rich Australia Exported Its Way Into an Energy Crisis

July 10, 2017

The world’s No. 2 seller abroad of liquefied natural gas holds so little in reserve that it can’t keep the lights on in Adelaide—a cautionary tale for the U.S.

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The LNG carrier Methane Spirit loads the the first LNG cargo from Australia Pacific LNG, January 9, 2016. Photo: Australia Pacific LNG

July 10, 2017 11:34 a.m. ET

On a sweltering night this February, the world’s No. 2 exporter of liquefied natural gas didn’t have enough energy left to keep its own citizens cool.

A nationwide heat wave in Australia drove temperatures above 105 degrees Fahrenheit around the city of Adelaide on the southern coast. As air-conditioning demand soared, regulators called on Pelican Point, a local gas-fueled power station running at half capacity, to crank up.

It couldn’t. The plant’s operator said it wasn’t able to get enough natural gas quickly to run its turbines fully. At 6:03 p.m., regulators cut power to 90,000 Adelaide homes to prevent a wider blackout.

Resource-rich Australia has an energy crisis, one that offers lessons for America as it prepares to vastly increase natural-gas shipments abroad.

Australia now exports so much liquefied natural gas, or LNG, it may overtake No. 1 exporter Qatar within several years. It exported 62% of its gas production last year, according to the BP Statistical Review of World Energy.

Yet its policy makers didn’t ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren’t sufficient.

Shortages drove domestic gas prices earlier this year in some markets in eastern Australia to as high as $17 per million British thermal units for smaller gas users such as manufacturers. On the spot market, gas prices have gone from below $1 in 2014 to roughly $7 today—well above the roughly $3 that prevails in the U.S.—causing havoc around the country.

In March, Australia’s largest aluminum smelter cut production and laid off workers because it said it couldn’t secure enough cheap energy. During one blackout last year, some families lost embryos in an in-vitro-fertilization clinic with no backup generation, according to a government-commissioned report. In February, some tuna fishermen watched catches rot because freezers shut off.

The blackouts have been severe enough to catch the attention of Tesla Inc. Chief Executive Elon Musk, who said last week he agreed to build a giant battery system in the state of South Australia, where Adelaide is the capital city, to store power from a wind farm. Such a system could provide electricity during shortages.

Prime Minister Malcolm Turnbull, in an emailed response to Wall Street Journal questions, blamed previous Labor governments. Mr. Turnbull, of the center-right Liberal Party, said “gas export licenses were issued without regard to the consequences for the domestic market,” and, “as a result, at a time of record gas production we have had the prospect of a shortage of domestic gas on the east coast.”

An LNG export facility in the distance near Gladstone.Photo: Rachel Pannett/The Wall Street Journal

The Labor Party says that when the LNG-export plants were approved, the industry said sales abroad wouldn’t impact domestic gas supply because it was developing new sources of gas. “It is clear that those assurances haven’t come to pass,” said Mark Butler, the Labor lawmaker who is currently its spokesman on energy. “If we had our time again, we would have put in place a national-interest test,” he said. Such a test insures domestic needs are protected.

Australia’s plight is less likely in America, which is experiencing a gas glut and is boosting exports. The first LNG-export terminal in the lower 48 states opened in Louisiana last year, allowing exports by ship in addition to existing pipelines to Mexico and Canada. Energy Secretary Rick Perry said at his Senate confirmation hearing he wanted to boost natural-gas exports.

The U.S. is on track to become the world’s No. 3 LNG exporter behind Qatar and Australia by 2020, according to the U.S. Energy Department.

Unlike Australia—which has plentiful gas supplies in its west but no pipelines to get them to its gas-starved east—the U.S. has a large pipeline grid, making it easier to move supplies during shortages. It also has largely avoided the kind of long-term export contracts that trapped Australian companies into giving foreign buyers priority.

Still, Australia’s gas pains offer a case study in what can go wrong in committing to expanding exports at the same time as other steady power sources are shutting down, said Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin. “We have more options” in America than Australia, he said, but “there’s always a risk that markets will behave in a different way than we anticipated.”

“There’s no one country that has mastered this,” Mr. Webber said. “We’re all learning from each other.”

Until the 2000s, Australia was a minnow in international energy markets. It had major gas deposits off its northwestern coast, but coal remained its dominant fuel source.

New gas source

Geologists had suspected there was methane gas buried in Australia’s vast coal seams. When energy prices climbed with Chinese demand, companies including BG Group PLC, now owned by Royal Dutch Shell PLC, rushed to extract this “coal-seam gas”—a process that involves pushing gas out of seams, sometimes through hydraulic fracturing, or “fracking”—in Australia’s east.

ConocoPhillips bought a 50% stake in an Australian coal-seam-gas venture for $8 billion in 2008. In 2010, Shell and PetroChina Co. in a $3 billion deal acquired coal-seam-gas producer Arrow Energy, which had a market value of $10 million a few years earlier.

Producers say they concluded the only way to justify the cost of extracting coal-seam gas was to sell it abroad, where demand was higher and customers would agree to long-term contracts. They also needed money to build terminals on the east coast to convert gas into liquid for shipping.

In 2009, BG Group and Adelaide-based Santos Ltd. signed 20-year export deals, the first of a string of long-term export contracts that coal-seam-gas concerns in Australia would sign.

In a 2009 report, the northeastern Queensland state’s government warned of “a real problem that the availability of gas in the ground may not translate into gas supplied to the domestic market.” It suggested requiring energy companies keep up to 20% of production for domestic users.

Australia’s energy companies argued such “gas reservation” policies would deter investment needed to boost supply. Many politicians emphasized how LNG projects would create jobs in the aftermath of the global financial crisis.

Lynda Pearce, 68, has seen her power bill go up.Photo: Rachel Pannett/The Wall Street Journal

Queensland didn’t institute a gas-reservation plan. Its government now says it couldn’t have predicted all the forces creating current shortages.

Western Australia state did implement a similar plan years before for its offshore gas, avoiding local gas shortages. The plan also applied to exports from LNG terminals added on the west coast after 2009.

In Australia’s east, three terminals were built off Gladstone in Queensland.

As gas production increased, Australia cut back on coal, whose use had put it among the world’s biggest greenhouse-gas emitters per capita. Coal-fueled plants were shut down without comprehensive plans for replacing them with other power sources.

South Australia and Queensland, in 2014 and 2015, set targets to get 50% of their electricity from renewable sources such as wind and solar. Gas, the argument went, would help fill the gap when renewable power wasn’t sufficient.

Some prospective new gas sources in the east were being shut down, with New South Wales placing a moratorium on fracking in 2011 and later freezing new exploration licenses for coal-seam gas. Victoria in March this year banned fracking and new coal-seam-gas development.

Santos and its partners weren’t able to pump as much gas as expected and began signing third-party supply contracts, including from other gas producers and electricity companies to meet export obligations, adding to factors driving up domestic prices.

As prices rose, some manufacturers using gas, such as fertilizer makers, publicly threatened to move operations abroad. Power plants relying on gas—currently about 25% of Australia’s power grid—raised rates.

“Santos has been singled out as almost the sole cause” of Australia’s gas problems, Santos Chairman Peter Coates told shareholders in May. Coal-seam gas could underpin Australia’s long-term needs with more investment and never would have been developed without foreign buyers, he said. “The gas would still be sitting in the ground.”

Gladstone, the city with the three new LNG-export facilities, has been among areas most affected. It is home to manufacturers that use gas, including Australia’s largest aluminum smelter, a Rio Tinto PLC plant that once distributed beer-can holders reading: “Proudly Australian, operating beyond 2030.”

In March, Rio Tinto cut 14% of the smelter’s production and laid off 100 workers, saying it couldn’t secure enough inexpensive energy. Rio Tinto CEO Jean-Sébastien Jacques in May said: “The price was so high that it didn’t make any sense anymore for us to produce.”

Kirsty Callander said her Fit Life smoothie-and-snack bar in Gladstone has seen business shrivel since the smelter layoffs. “I think Australia should keep what’s ours,” she said, “and get the jobs and money coming here.” Down the road at Tannum Meats, store manager Nathan Lynn said he once sold a dozen rib-eye steaks a day and now is lucky to sell that in four days.

Kirsty Callander has seen business shrivel since the smelter layoffs.Photo: Rachel Pannett/The Wall Street Journal

In February, regulators ordered another aluminum smelter, in New South Wales, to cut production to prevent power outages in the state, which includes Sydney.

Repeated outages

Outages have become a familiar gas-crisis byproduct, including one last September in which 1.7 million households and businesses in South Australia state lost power after tornadoes damaged lines supplying power from Victoria. South Australia was relying on other states for electricity because volatile gas prices and other issues had forced its generators to cut capacity. Power wasn’t fully restored for 12 days.

In the week that Adelaide’s February blackout cut power to 90,000 homes, five ships left Gladstone carrying out 314,000 tons of LNG altogether, according to the port operator. That’s enough to generate electricity for roughly 750,000 Australian homes for a year, according to calculations for the Journal by the Australian Bureau of Statistics.

The Adelaide blackout traced to 2015, when the Pelican Point gas-fired power plant’s owner, Engie SA  of France, mothballed one of its two turbines, saying it was too expensive to run at prevailing gas prices.

When Australia’s electricity overseer, the Australian Energy Market Operator, ordered Pelican Point to fire up its second turbine that hot February day, Engie initially said it wasn’t available. When the regulator insisted, Engie said it couldn’t move quickly without gas-supply contracts.

Pelican Point power station.jpg

Engie declined to comment about the blackout. In a media statement afterward, it said: “There is no commercial rationale to operate the second Pelican Point unit in the current market environment in [South Australia] for a small number of days across the year.”

Engie in March agreed to restart the second turbine after Origin Energy Ltd. , which operates one of the Queensland LNG plants, committed to provide gas to Pelican Point and buy some of its electricity.

Prime Minister Turnbull that month urged producers to reserve more gas for the domestic market. He declared in April he would invoke little-used trade powers to block some exports until local needs were met; the measures went into effect July 1.

The energy regulator in June said the market and government response should help secure the power grid, though it “remains susceptible” to extreme summer conditions.

South Australia and Queensland are promising to open more land to gas development. Shell has reduced exports from one Australian LNG facility to supply more gas locally and recently signed supply contracts with utilities, including a short-term deal with Engie.

Companies’ flexibility to make such concessions is constrained by overseas contracts, industry analysts say. Without more gas production or faster development of other power sources, many say, Australia faces more shortfalls.

“It takes long lead times to bring on new gas developments,” said Saul Kavonic, a Perth-based analyst at energy consultancy Wood Mackenzie. “You can’t just press a magic button and fix it overnight.”

Meanwhile, budgets of Australians such as retiree Lynda Pearce, 68, are feeling the shortage’s impact. “I’m really worried about what’s going to happen. It’s sort of like waiting for a bomb to explode,” said Ms. Pearce, who in a Gladstone suburb has seen her power bill go up around 6% in three months.

Nearby, Gladstone’s LNG plants continue exporting. “It seems stupid,” she said, “to send the gas offshore when people want it here.”



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South Australia power lines down after storm


Gulf deadline to resolve Qatar rift approaches

July 2, 2017

Buildings are seen on a coast line in Doha, Qatar June 5, 2017. REUTERS/Stringer
By Sylvia Westall | DUBAI

Qatar faces possible further sanctions by Arab states that have severed ties with Doha over allegations of links to terrorism, as a deadline to accept a series of demands is expected to expire on Sunday night with no signs of the crisis ending.

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said the demands were made to be rejected, adding that the Arab ultimatum was aimed not at tackling terrorism but at curtailing his country’s sovereignty.

But he told reporters in Rome that Doha remained ready to sit down and discuss the grievances raised by its Arab neighbors.

“This list of demands is made to be rejected. It’s not meant to be accepted or …to be negotiated,” Sheikh Mohammed said in Rome. “The state of Qatar instead of rejecting it as a principle, we are willing to engage in (dialogue), providing the proper conditions for further dialogue.”

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani attends a news conference in Rome, Italy, July 1, 2017.REUTERS/Alessandro Bianchi

He added that no one had the right to issue an ultimatum to a sovereign country.

The feud erupted last month when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and travel ties with Qatar, accusing it of supporting terrorism and being an ally of regional foe Iran, charges which Doha denies.

The countries have threatened further sanctions against Qatar if it does not comply with their list of 13 demands which were presented to Doha by Kuwaiti mediators 10 days ago.

The demands include closing a Turkish military base in Qatar and shutting down the Al Jazeera pan-Arab television network, which Doha also rejected.

Qatar’s Gulf critics accuse Al Jazeera of being a platform for extremists and an agent of interference in their affairs. The network has rejected the accusations and said it will maintain its editorial independence.


Gulf countries have insisted the demands were not negotiable.

The UAE ambassador to Russia has said Qatar could face fresh sanctions if it does not comply with the demands.

Gulf states could ask their trading partners to choose between working with them or with Doha, he said in a newspaper interview last week.

But UAE foreign affairs minister Anwar Gargash played down the chances of an escalation, saying “The alternative is not escalation but parting ways”, suggesting Qatar may be forced out of the six-member alliance.

The Western-backed body was formed in 1981 in the wake of Iran’s Islamic Revolution and the outbreak of the Iran-Iraq war, by Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.

Speaking in Washington last week, the Qatari foreign minister said the GCC was set up to guard against external threats.

“When the threat is coming from inside the GCC, there is a suspicion about the sustainability of the organization,” Sheikh Mohammed told reporters.

The crisis has hit travel, food imports and ratcheted up tensions in the Gulf and sown confusion among businesses, while pushing Qatar closer to Iran and Turkey.

But it has not hit energy exports from Qatar, which is the world’s biggest exporter of liquefied natural gas (LNG) and home to the region’s biggest U.S. military base.

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The rift opened days after U.S. President Donald Trump met with Arab leaders in Riyadh and called for unity against regional threats such as Iran and hardline Islamist militant groups.

(Reporting by Sylvia Westall and Philip Pullella; editing by Sami Aboudi and Stephen Powell)





Qatar Says Won’t Negotiate Until Economic Boycott Ends

June 19, 2017

DOHA — Qatar will not negotiate with Arab states that have cut economic and travel ties with it unless they reverse their measures, its foreign minister said, ruling out discussions over Qatar’s internal affairs including Al Jazeera TV.

Sheikh Mohammed bin Abdulrahman al-Thani said Qatar had still not received any demands from Saudi Arabia, the United Arab Emirates and Bahrain, which severed relations two weeks ago, triggering the worst Gulf Arab crisis in years.

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Sheikh Mohammed bin Abdulrahmanal-Thani

The countries accuse Qatar of supporting Islamist militants and stirring up unrest, charges Doha denies.

“Qatar is under blockade, there is no negotiation. They have to lift the blockade to start negotiations,” Sheikh Mohammed told reporters in Doha. “Until now we didn’t see any progress about lifting the blockade, which is the precondition for anything to move forward.”

He said Kuwait’s ruler was the sole mediator in the crisis and that he was waiting for specific demands from Gulf states in order to take resolution efforts forward.

“We cannot just have (vague) demands such as ‘the Qataris know what we want from them, they have to stop this or that, they have to be monitored by a foreign monitoring mechanism,'” Sheikh Mohammed said.

Anything that relates to the affairs of the six-nation Gulf Cooperation Council is subject to negotiation, he said, referring to the body comprising Qatar, Saudi Arabia, the UAE, Bahrain, Kuwait and Oman.

“Anything not related to them is not subject to negotiation. No one has the right to interfere in my affairs. Al Jazeera is Qatar’s affairs, Qatari foreign policy on regional issues is Qatar’s affairs. And we are not going to negotiate on our own affairs,” he said.

Qatar’s Gulf critics have accused Al Jazeera of being a platform for extremists and an agent of interference in their affairs. The network has rejected those accusations and said it will maintain its editorial independence.

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The crisis has hit civilian travel, some food imports, ratcheted up tensions in the Gulf and sown confusion among businesses. But it has not affected energy exports from Qatar, the world’s biggest exporter of liquefied natural gas (LNG).

Sheikh Mohammed said Qatar would rely on other states if the boycott continued, including Saudi Arabia’s arch regional foe Iran.

“We have a back-up plan which depends mainly on Turkey, Kuwait and Oman,” he said. “Iran has facilitated for us the sky passages for our aviation and we are cooperating with all countries that can ensure supplies for Qatar.”

(Reporting by Tom Finn; writing by Sylvia Westall; editing by Mark Heinrich)

Qatar ‘extremely comfortable’ despite sanctions, markets stabilize — Iran and Morocco send food

June 13, 2017


Tue Jun 13, 2017 | 3:19am EDT

By John Davison and Andrew Torchia | DOHA/DUBAI

Qatar’s financial markets stabilized on Monday after a week of losses as the government showed it could keep the economy running in the face of sanctions by its neighbors.

The finance minister of the world’s richest country per capita played down the economic toll of the confrontation, and said the government was “extremely comfortable” with its financial position, with the resources to endure the pressure.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar a week ago, accusing it of fomenting regional unrest, supporting terrorism and getting too close to Iran, all of which Doha denies.

The biggest diplomatic rift in years among the rich states of the Gulf has disrupted Qatar’s imports of food and other materials and caused some foreign banks to scale back business.

On Monday, it was becoming clear that Qatar could keep the economic damage from becoming critical. Some of its food factories were working extra shifts to process imports from nations outside the Gulf, such as Brazil. Shipping lines have re-routed container traffic via Oman instead of the UAE.

Such measures may involve delays and raise costs for Qatar; on Monday Fitch put Qatar’s AA credit rating on Rating Watch Negative, saying a sustained crisis could hurt its credit outlook. But they are unlikely to prevent the economy from functioning in any fundamental way, economists say.

The diplomatic confrontation has become a major test for the United States, which is closely allied to the countries on both sides. Qatar hosts the Middle East headquarters for U.S. air forces; Bahrain hosts the main base for the U.S. Navy.

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As the world’s leading exporter of liquefied natural gas, Qatar’s wealth has allowed it to crown its small Gulf peninsula with skyscrapers. It has also given the government the means to take an outsized role in regional affairs, sponsoring factions in revolts and civil wars and brokering peace deals across the Middle East. Several neighbors have been furious for years.


In Washington, U.S. President Donald Trump, who has strongly backed the countries imposing sanctions on Qatar despite a more neutral stance taken by the State Department and Pentagon, said the measures were helping to stop terrorism funding.

A logo of Qatar Airways is seen at Hamad International Airport in Doha, Qatar June 12, 2017. REUTERS/Naseem Zeitoon

“One of the big things that we did and you are seeing it now is Qatar and all of the things that are actually going on in a very positive fashion. We are stopping the funding of terrorism,” he said during a photo call with cabinet officials. “We are going to starve the beast.”

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Qatari Food companies step in to fill the void.  Workers work in a meat processing plant in Doha, Qatar, June 10, 2017. REUTERS/Naseem Zeitoon

Qatari Foreign Minister Sheikh Abdulrahman al-Thani told a news conference in France that Qatar “still had no clue” why the nations cut ties. He denied that Qatar supported groups like the Muslim Brotherhood that its neighbors oppose, or had warm ties with their enemy Iran.

So far, the measures do not seem to have caused a serious shortages of supplies in shops. Some people have even joked about being “blockaded” inside the world’s richest country: a Twitter page called “Doha under siege” pokes fun at the prospect of readying “escape yachts”, stocking up on caviar and trading Rolex watches for espresso.

But an economic downturn could have more dire consequences for the vast majority of Qatar’s 2.7 million residents, who are not citizens but foreign workers. Migrant laborers make up 90 percent of Qatar’s population, mostly unskilled and dependent on construction projects such as building stadiums for the 2022 soccer World Cup.

In an interview with CNBC television — one of the first public appearances by a Qatari economic policy maker since the crisis erupted — Finance Minister Ali Sherif al-Emadi said the government was “extremely comfortable with our positions, our investments and liquidity in our systems”.

The energy sector and economy are essentially operating as normal and no serious impact has been felt on supplies of food or other goods. Qatar can import goods from Turkey, the Far East or Europe and will respond to the crisis by diversifying its economy even more, he told CNBC.

“Our reserves and investment funds are more than 250 percent of gross domestic product, so I don’t think there is any reason that people need to be concerned about what’s happening or any speculation on the Qatari riyal.”

Jason Tuvey, a Middle East economist at London-based Capital Economics, said that as long as the other Gulf countries did not interfere with Qatar’s gas exports, the tiny state should be able to carry on without a serious recession.

“It seems Qatar would be able to weather quite a prolonged period of sanctions,” he said, adding that economic growth, fueled by government spending and infrastructure projects, was “highly unlikely to grind to halt”.

Qatar, like other Gulf states, has tried to diversify from oil and gas. The sanctions have hurt one of its highest-profile enterprises, fast-growing airline Qatar Airways, which says it has been cut it off from 18 of its destinations.

“It is actually a travesty of civilized behavior to close airline offices. Airlines offices are not political arms,” CEO Akbar Al Baker told CNN. “We were sealed as if it was a criminal organization. We were not allowed to give refunds to our passengers.”

He added that he was “extremely disappointed” in Trump. Washington “should be the leader trying to break this blockade and not sitting and watching what’s going on and putting fuel on (the) fire.”


Qatar’s riyal currency, pegged at 3.64 to the U.S. dollar, was under pressure last week as banks reacted nervously to the diplomatic rift. On Monday, the currency came off last week’s lows in the spot QAR= and offshore forwards markets QAR1Y=W.

Bankers said the central bank, which has $34.5 billion of net foreign reserves backed by an estimated hundreds of billions of dollars of assets in Doha’s sovereign wealth fund, was supplying enough dollars to keep exchange rates under control.

The cost of insuring Qatar’s sovereign debt against default QAGV5YUSAC=MG fell back for the first time in a week. Yields on Doha’s international bonds XS140578215=TE dropped almost 10 basis points and the stock market .QSI stabilized after sliding 8.7 percent in the past week.

Tuvey said the main threat to the economy was that Qatari banks could find it much harder to obtain wholesale funding from other banks to sustain growth in their loan portfolios. However, if the situation becomes critical, the Qatari government can liquidate some of its overseas assets to fund its banks, as Saudi Arabia did last year when its banks faced a squeeze.

Qatar’s sovereign wealth fund has major stakes in top Western companies such as Credit Suisse (CSGN.S). Asked by CNBC whether it might now sell some of those stakes to raise money, Emadi indicated this was not on the cards for now.

Qatar’s normally bustling border with Saudi Arabia was deserted on Monday. Soldiers in an armored pick-up truck looked out over barbed-wire at sprawling dustland separating Qatar from Saudi Arabia. Indian migrants who work at the border in green uniforms lay on inspection platforms sheltering from the sun.

Normally, thousands of passengers and hundreds of trucks from Saudi Arabia pass through the crossing each day, bringing fruit and vegetables, as well as construction materials.

(Additional reporting by Tom Finn and Ibrahim Saber at the Abu Samra border crossing and Steve Holland in Washington; Editing by Peter Graff and Peter Millership, Larry King)



Tue Jun 13, 2017 | 3:19am EDT

Morocco says will send food to Qatar after Gulf states cut ties

Morocco said it would send plane-loads of food to Qatar to boost supplies there after Gulf Arab states cut diplomatic and economic ties with Doha.

Qatar, which imported 80 percent of its food from bigger Gulf Arab neighbors before the diplomatic shutdown, has also been talking to Iran and Turkey to secure food and water.

“This decision was made in conformity with Islamic precepts that call for solidarity and mutual aid between Muslim people, notably during this holy month of Ramadan,” the Moroccan foreign ministry statement said on Monday.

Saudi Arabia, the United Arab Emirates, Egypt and Bahrain accuse Qatar of supporting militants – an allegation dismissed by Doha.

On Sunday, Morocco said it would remain neutral in the dispute, offering to mediate between the Gulf countries, which are all close allies to the North African kingdom.

Qatar’s finance minister said on Monday the world’s richest country per capita has the resources to endure and played down the economic toll of the confrontation.

(Reporting by Samia Errazzouki; Editing by Patrick Markey and Andrew Heavens)


Beijing: U.S. Energy Secretary Rick Perry calls for cooperation on clean energy between U.S. and China

June 8, 2017


© POOL/AFP | US Energy Secretary Rick Perry (left) shakes hands with China’s Vice Premier Zhang Gaoli in Beijing on June 8, 2017


US Energy Secretary Rick Perry called for Sino-US cooperation on clean energy during a visit to Beijing Thursday, a week after President Donald Trump’s much-criticised withdrawal from the Paris climate pact.

Trump’s decision has jolted the international community and could put China, the world’s top carbon emitter, in a position to fill the leadership void on curbing global warming.

But Perry said the United States was still eager to work with China on developing clean energy technology such as liquefied natural gas, clean coal and nuclear power.

“We have extraordinary opportunities to be partners to work on clean energy issues,” Perry said during a meeting with China’s number seven, Zhang Gaoli, on the sidelines of a ministerial-level clean energy meeting in Beijing.

The relatively low-level reception was a contrast to the red carpet Beijing rolled out for California governor Jerry Brown earlier this week.

Brown met for almost an hour with Chinese President Xi Jinping and they signed a memorandum of understanding on developing clean energy.

Brown has vowed to step into the vacuum left by Trump’s exit from the Paris accords, and has mounted a vigorous PR campaign on behalf of his state’s leadership on environmental issues during his week long tour of China.

Beijing has said it will stick with the agreement despite the US withdrawal and is seeking to reach out to American states that share its determination.

California, which has the world’s sixth-largest economy, is one of a handful of American states that have pledged to continue fighting climate change regardless of action at the federal level.

The state — which has some of the worst air pollution in the country — has dramatically slashed its harmful emissions in the last decade.

It has pledged to cut greenhouse gas emissions to 1990 levels by 2020, and to 40 percent below 1990 levels by 2030.

Before setting off for China, Brown pledged California would resist Trump’s decision to abandon the Paris deal, describing the move as “misguided and insane”.

Warsaw court jails lawyer for spying for Moscow

March 20, 2017


© AFP/File | A lawyer has been jailed in Poland for giving Russia information on a new liquefied natural gas terminal at Swinoujscie, whose port is pictured above, on the Baltic coast
WARSAW (AFP) – A Polish-Russian lawyer has been sentenced to four years in prison for spying for Russia’s GRU military intelligence agency, a Warsaw court said Monday.The lawyer, a man with dual citizenship identified only as Stanislaw Sz. for legal reasons, pleaded not guilty at the trial held behind closed doors. He can appeal the verdict.

Judge Agnieszka Domanska said the man gave Russia information on Poland’s energy sector, in particular regarding a new liquefied natural gas terminal at Swinoujscie on the Baltic coast, according to the Polish news agency PAP.

He notably got hold of a secret report by the national audit chamber NIK on natural gas contracts and the launch last June of the Swinoujscie terminal, which Poland built to ease its dependence on Russian gas.

Poland currently relies on Russia for about forty percent of its gas, with a third coming from domestic sources and 20 percent from central Asia.

Stanislaw Sz. was arrested in October 2014, at the same time as a Polish officer, Zbigniew J., who was sentenced last year to six years in prison by the Warsaw military court for spying for Russia.

Their cases were related but the two men did not work together, according to Polish media reports.

Australian deputy PM flags lifting gas drilling bans — Energy shortage could trigger further broad power outages and industry supply cuts

March 18, 2017


By Harry Pearl | SYDNEY

Australia’s deputy prime minister said he would support lifting bans on coal seam gas (CSG) drilling if landowners were given a bigger slice of royalties, a significant policy shift as the country scrambles to avoid a looming energy crisis.

Australia, with an abundance of natural riches, was supposed to be a world energy power on its way to becoming the largest global exporter of liquefied natural gas (LNG), but the government instead finds itself battling to explain why the country is unable to keep the lights on at home.

A series of massive blackouts in South Australia state has already caused major embarrassment and the national energy market operator has warned of a domestic gas crunch from 2019 that could trigger further broad power outages and industry supply cuts.

Deputy Prime Minister Barnaby Joyce’s support to lift the CSG ban – if landowners were granted royalties – could be a game changer as his right-wing National Party has traditionally opposed such a move.

“By paying a royalty it means the value of a farmer’s land increases as a result of gas extraction, rather than decreasing,” said Joyce, who is also the agricultural minister, in comments confirmed by his office on Saturday.

Manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts.

Restrictions on drilling CSG have added to supply constraints. Under pressure from green voters and farmers, the state of Victoria has banned onshore gas developments, including fracking, and New South Wales state has prevented developments.

Australia’s power supply problems made international headlines last week when Tesla Inc boss Elon Musk offered to save South Australia, the country’s most renewable-energy dependent state, from recurring blackouts by installing battery storage worth $25 million within 100 days.

Prime Minister Malcolm Turnbull also this week floated spending up to A$2 billion ($1.5 billion) to expand the Snowy Hydro power scheme and held crisis talks with major gas producers, including Exxon Mobil Corp and Royal Dutch Shell, who have large export contracts.

(Reporting by Harry Pearl; Editing by Jane Wardell and Tom Hogue)



New Milestone: The U.S. Is Now a Net Exporter of Natural Gas

November 27, 2016

The country will be the world’s third-largest producer of liquefied natural gas for export by 2020, according to the Energy Department

Two contractors talk on a natural gas drilling rig in Keene, Texas. In November—as well as for a short period in September—the U.S. exported more natural gas than it imported, marking the first times the country has ever been a net exporter of the commodity.
Two contractors talk on a natural gas drilling rig in Keene, Texas. In November—as well as for a short period in September—the U.S. exported more natural gas than it imported, marking the first times the country has ever been a net exporter of the commodity. PHOTO:RUSSELL GOLD/THE WALL STREET JOURNAL

Nov. 27, 2016 10:00 a.m. ET

The U.S. has become a net exporter of natural gas, further evidence of the how the domestic oil and gas boom is reshaping the global energy business.

The U.S. has exported an average of 7.4 billion cubic feet a day of gas in November, more than the 7 billion cubic feet a day it has imported, according to S&P Global Platts, an energy trade publisher and data provider. Exports also topped imports for a few days in September, Platts reported. It has been nearly 60 years since the U.S. last shipped out more natural gas than it brought in annually, according to the U.S. Energy Information Administration.

The milestone comes less than a year after restrictions on most crude oil exports were lifted, allowing tankers of crude to be freely shipped overseas for the first time nearly half a century, and together they mark a significant and potentially permanent change in the way U.S. energy flows around the world. Overseas producers now have to deal with the growing clout of the U.S. energy industry, which is aggressively looking to ramp up its global market share to help offset a long period of low prices.

“It’s indicative of things to come,” said Sid Perkins, managing partner at the brokerage Ion Energy Group. Natural gas is “going to be taking on the characteristics of a global-macro market, like crude, where global factors will influence what happens to gas.”

A blast of cold weather could cause heating demand to rise and tip the U.S. back into being a net importer, analysts said. Still, the rise in overseas sales is a welcome development for an industry that produced far more than the U.S. can consume.

A glut of supply dragged prices down to a 17-year low in March. They have rebounded by more than 80% since then, as summer demand has worked through high inventories and winter consumption looks set to pick up, but are still well below their levels before the oil boom deflated.

Gas exports have risen more than 50% since 2010. The U.S. will ship gas equal to as much as a fifth of its annual consumption abroad by 2020, Citigroup estimates. The Energy Department says the country will be the world’s third-largest producer of liquefied natural gas for export by that year, trailing Australia and Qatar.

The biggest buyers are North American Free Trade Agreement partners Mexico and Canada. A series of new pipelines running across the southern border helped shipments to Mexico reach an all-time high in August and accounted for almost 6% of total U.S. gas production, according to the EIA. Mexico uses U.S. gas to run power generators and offset declines in domestic production.

Exports to Canada—where U.S. gas heats homes and businesses—have remained relatively steady over the past few years and accounted for 2.5% of production in August.

Some analysts fear President-elect Donald Trump’s pledge to revisit U.S. trade policy with Mexico could slow the rise of gas exports to that country, but the industry also is cracking open new markets farther from home.

Shipments from Cheniere Energy Inc.’s Sabine Pass liquefied natural gas terminal have grown to average 1.5 billion cubic feet of gas a day since February, when exports from the facility began.

Cheniere initially intended to receive LNG when it opened the terminal in 2008. But with the surge of natural gas being released from shale formations, it became the first U.S. gas company to request government permission to reverse the flow and ship the gas abroad instead.

Plans to export natural gas to countries such as Singapore and South Korea, which have free trade agreements with the U.S., could be authorized quickly. But shipments to countries that don’t have such agreements, a group that includes big LNG buyers like Japan, require additional government scrutiny. Cheniere won approval to sell gas to that latter group in 2011.

Gas is just one of the first signs of the growing strength of U.S. production power.

—Citigroup global energy strategist Anthony Yuen

Cheniere continues to expand Sabine Pass, and several other export terminals are expected to come online starting in 2017 and 2018. In 2013, the Freeport LNG terminal at Quintana Island, Texas, became the second to win government approval to export. It is slated to begin shipping out gas in 2018. Dominion Resources plans to begin shipping LNG bound for Cheniere from its terminal on the Chesapeake Bay next year.

Slowing demand and surging supplies have pushed global spot prices of LNG down and have made it harder to ink the long-term contracts that underpin financing for export terminals. Royal Dutch Shell PLC said earlier this year that it would delay making a final decision on its plans to help develop a natural gas export terminal at the site of an existing import terminal in Lake Charles, La., saying the market is already amply supplied. A Shell spokesman said the company plans to periodically review the project.

Still, the exports show how American shale energy producers continue to expand their influence in ways few predicted a decade ago.

“Gas is just one of the first signs of the growing strength of U.S. production power,” said Anthony Yuen, global energy strategist at Citigroup.

Write to Stephanie Yang at and Alison Sider at