LONDON: Top gas producer Qatar is asking the European Union to restrict resales of gas outside the bloc if it wants Qatar and other major gas suppliers to provide emergency supply in case of a Russia-Ukraine conflict, a person briefed on the talks said.
Qatar has also requested an EU resolution to a 2018 probe into its long-term contracts, which the European Commission had said might be inhibiting the free flows of gas in Europe and its single gas market, the source told Reuters.
The requests made by Qatar go to the core of EU’s gas market liberalisation. The EU sees totally free trade of gas as essential to energy security but major producers and some gas consumers say the reforms of the past two decades have often wreaked havoc and led to higher prices.
The United States is concerned that Russia is preparing to invade Ukraine and has in recent weeks asked Qatar and other major gas producers to study if they can supply extra gas to Europe if Russian flows are disrupted.
Moscow, which has amassed some 120,000 troops near its neighbour, denies plans to invade Ukraine and accuses the West of ratcheting up tensions.
Russia supplies around a third of Europe’s gas and any interruption would worsen an existing energy crisis caused by a global shortage of oil and gas.
Although Qatar lacks enough spare gas, it has signalled it would be willing to divert some volumes from Asia with mediation from the United States.
Doha has not yet made such a request to divert shipments, according to the source and another person briefed on such discussions.
Possible emergency supplies for Europe will be discussed at talks in Washington this week between the Emir of Qatar Sheikh Tamim bin Hamad al-Thani and U.S. President Joe Biden.
Over the past week, Doha has also made its requests known to the EU and the Emir has spoken to the president of the European Commission Ursula von der Leyen. The European Commission said it would not comment on the details of discussions with international partners on gas supplies.
“Qatar’s supply wouldn’t be conditional on requests. But the issues need to be dealt with to ensure long-term and short-term solutions for Europe’s LNG crisis,” the source said.
Doha also wants the EU to resolve its long-running probe into Qatar’s long-term contracts.
“That will ensure the EU can enter into long-term contracts with Qatar and others instead of more costly spot contracts or searching for short-term solutions during crisis,” the source said.
Doha also wants EU guarantees that member states divert any surplus LNG only inside the EU.
“If not implemented, emergency shipments to the EU could be resold as spot-shipments for a profit out of the EU, basically prolonging the energy shortage in the EU,” the source said.
“These solutions wouldn’t be just for Qatar. It’s really to ensure any possibility of solutions for Europe whether Qatar or others,” the source said.