Qatar’s energy minister Saad al-Kaabi has highlighted the necessary link between LNG and renewable development in meeting energy transition goals.
Highlighting the growing risks of supply crunches and resulting energy security impacts of new energy source, al-Kaabi predicted that the transition to low-carbon energy will be long and complex.
“Gas will be indispensable, especially given its reliability as a baseload source," Saad al-Kaabi, said during an event in Tokyo, adding that that renewables cannot be “the sole solution” and that gas offered a “cleaner, cost-effective and ready-to-use component of energy transition”.
Japanese interest
While in Japan the energy minister conducted a number of high-level meetings with officials aimed at boosting LNG exports to the country. Japan is one of a number Asian nations that has accelerated its shift to LNG in recent years, but increased demand is increasingly fuelling competition for relatively limited shipments.
During his visit al-Kaabi met with multiple leading Japanese firms, both in his role as minister and as CEO of national energy firm QatarEnergy, including JERA, Chubu Electric, Tohoku Electric, Marubeni, Mitsui, Mitsubishi, LNG Japan and Japan Bank for International Cooperation (JBIC).
Despite productive conversations, a gap still remains between supply and demand. Hiroshi Hashimoto, senior fellow of the energy security unit at the Institute of Energy Economics, Japan comments that Japanese end-users typically seek short to mid-term LNG contracts whereas more long-term, large-scale contracts could be more beneficial if Japanese portfolio players or consortiums aggregated purchases.
"[Qatar] is an extremely favourable and credible supply source on supply conditions, except for pricing and destination conditions," Hashimoto adds.
North Field expansion
Adding to momentum for Qatar’s LNG exports is the massive expansion of the state’s North Field reserve. In early October, Sheikh Tamim bin Hamad Al Thani, Emir of Qatar, laid the foundation stone of the North Field expansion project.
'There is no doubt that these additional quantities of natural gas are of great importance as they will play a prominent role in enhancing energy security, supporting a practical and realistic energy transition, and ensuring fair and equitable access to cleaner energy for a sustainable growth and a better future for all,” al-Kaabi said.
The huge new North Field project will raise Qatar's LNG production capacity from 77 million tons per annum (MTPA) currently to 126 MTPA by 2026.
