FT reported that China is to become the biggest customer for Qatar's natural gas if a new export agreement is concluded. As per report, Qatar is in talks to sell an extra 10 million tons of LNG to China a year and 4 million tons to India to meet Asia's thirst for energy to offset slowdowns in the US and Europe.
Mr. Abdullah Attiyah energy minister of Qatar said that the paper the GCC State already sold 5 million tons of LNG TO China. If the new agreement is signed, China would overtake Japan which buys about 8 million tons a year and become Qatar's main gas customer. He said that the extra supplies for China and India would mostly be diverted from the US and some from Europe.
The report said that Qatar is expanding its gas export capacity in spite of concerns about a surplus in global supplies placing downward pressure on prices, particularly in the US. Qatar was on schedule to increase its capacity from 62 million tons to 77 million by the end of September. Qatar is in a very strong position. It's got the infrastructure, it's got the gas, it's well developed so, in terms maximizing the value of its gas it is pretty well placed. Gas prices are often linked to oil but there is no uniform pricing mechanism. Qatar wants gas to be priced on parity with oil, a move that would give exporters greater stability.