Doha eyes more gas supplies to Britain after Brexit

BIRMINGHAM: Britain’s Prime Minister Theresa May, during the Qatar-UK Business and Investment Forum in Birmingham yesterday. The energy-rich nation of Qatar says it plans to invest 5 billion pounds in the British economy within the next half decade. — AP

DUBAI: The energy-rich nation of Qatar says it plans to invest 5 billion pounds in the British economy within the next half decade. Prime Minister Abdullah bin Nasser Al-Thani announced the $6.3 billion investment at an investment forum in London. He said the outlay would come over the next three to five years through investment funds and other “relevant parties” in the Gulf Arab country, a major exporter of natural gas.

The 2022 World Cup host nation has already invested heavily in Britain. Its holdings include a stake in British bank Barclays and several prominent London properties, including the iconic Harrods department store. The OPEC member announced plans to invest $35 billion over five years in the United States in 2015.

Qatar sees Britain’s exit from the European Union as an opportunity to boost supplies of liquefied natural gas to the world’s fifth-largest economy and is open to investing in British energy assets, Qatar’s energy minister said.

The Gulf state has 40 billion pounds ($50 billion) of investments in Britain and delivers 90 percent of Britain’s imports of liquefied natural gas. Qatar, the world’s biggest exporter of LNG, pledged 5 billion pounds of investment in Britain on Monday in a show of support as Prime Minister Theresa May begins the formal process of negotiating a divorce settlement with the EU.

“The UK will have a new era post-Brexit … The negotiations will start among Europeans and nobody is extremely clear about where the negotiations will lead to,” energy minister Mohammed bin Saleh Al-Sada said in an interview late on Monday.

“However, we can sense the possibility of the UK’s manufacturing power going higher, and with that the need for energy. For that, Qatar will always be there to supply the energy required. Certainly we can contribute to the UK’s need.” Britain started receiving LNG from Qatar in 2008 via ships that dock at South Hook in Kent, one of Europe’s largest LNG terminals, which is owned by Qatar.

Qatar faces rising competition in Asia from other LNG producers as new projects in the United States and Australia come online in the next few years, and Doha has said it will focus on expanding contracts in Europe. “Europe is an important market. The UK is a very important market,” Sada said.

When global oversupply of gas peaks in the next two to three years, a possible rise in demand for energy in Europe and Britain could present an opportunity for Qatar, he added.

Doha has made billions of dollars securing long-term contracts with Asian consumers such as Japan and has the world’s largest fleet of LNG carriers. Like other Gulf economies, Qatar is trying to restructure its economy to rely less on hydrocarbons, and Sada said Britain could contribute. “They can also help us in our endeavor of diversifying the economy – we can complement each other.”

Sada said Qatar supported a free-trade agreement with Britain that the six-nation Gulf Cooperation Council, which also includes Saudi Arabia and the United Arab Emirates, hopes to draw up ahead of Brexit to ensure preferential arrangements.

“Qatar is supporting that. That would be excellent. Qatar will do its best to further this agreement.” The head of Qatar Petroleum has said Qatar plans to increase its investments in upstream energy assets overseas. It has been exploring for gas in Cyprus and looking at assets in Mozambique, sources told Reuters last year.

Asked whether Qatar would consider investing in British energy assets, Sada said: “Although I cannot mention projects by name, Qatar is fully open-minded about considering projects as long as they are economically viable.” -Agencies