Middle East

Can Qatar and Japan’s LNG “marriage” survive the changing dynamics of the market? -Doha News

Qatar and Japan are one of the most important relationships in the world of liquefied natural gas (LNG).

Energy security has gained worldwide attention in recent months as tensions between long-term rivals Russia and Ukraine continue to rise.

While trying to strengthen Kiev’s security due to concerns about a possible invasion by Moscow, the United States finds itself at a crossroads between concerns about potential escalations and the protection of Europe’s fragile gas supply. I did.

In a struggle to secure Europe’s energy supply, the Joe Biden administration is reaching out to major LNG producers, including: Qatar, South Korea, Japan, Algeria.. However, in the map of mega LNG producing countries, there is a clear gap between the two major producing countries, Qatar and Japan.

of November Last year, JERA, Japan’s largest power generation company, decided not to renew its 25-year contract with Qatar. Qatar provided 5.5 million tons (metric tons) of LNG annually.

Satoshi Onoda, the chief of a Japanese company, said that “due to the development of the global LNG market”, JERA was unable to conclude a large-scale contract at that time.

Qatar states that in tensions between Russia and Ukraine, Europe’s gas supply alone cannot be met.

Mr. Onoda said, “I had to give up this time because the conditions of the request from the Qatar side did not match,” and said that he did not want to give up the same contract.

Nonetheless, this decision has hurt what experts describe as “one of the most important relationships in the world of LNG.”

“The’marriage’between Qatar and Japan is one of the most important relationships in the world of LNG, with a long and interesting history dating back many years,” said Susan Sakumar, a visiting assistant professor at the University of Houston Law Center. Told. Doha News..

While Japanese official Recent reports ensuring that termination of long-term contracts do not affect relations with Doha in Tokyo suggest opposition.

Japanese media, Nikkei viewRecently quoted as a Qatari official said: “Wait until the next crisis. Where do you get LNG?”

“I don’t want to go to Tokyo either,” a Qatari official not mentioned on the news site added, referring to where JERA’s headquarters are located.

However, on the other hand, JERA’s decision is reported to have offended Japanese officials.

“We know we can’t blame private business decisions about bilateral relations, but was there a cleaner way to take a break?” METI (METI) ) Asked a Japanese government official.

Japan’s internal dissatisfaction with JERA’s handling of contracts with Qatar could be justified by the deep history of both countries in the energy sector.

It is worth noting that Japan received the first LNG shipment in Qatar in 1997. Since then, over 3,000 shipments have been shipped.

Gulf countries average to Japan 7.2 million tons Of annual gas. However, since the end of the contract in December 2021, the number has decreased to: 2 million tons.

Qatar has grown to be a reliable energy partner during the 2011 Fukushima nuclear accident. At that time, Asian countries needed LNG to compensate for the damage suffered by the entire nuclear power plant.

Doha supplied Tokyo with up to 17 million tonnes. This is about 20% of Japan’s total imports in 2013.

“JERA’s decision not to extend its 25-year contract with Qatar certainly bears the business and geopolitical implications of a mutually beneficial relationship,” he said. “Energy” author Sakmar said.

He added that Japan is trying to reduce its reliance on imports and reopen its nuclear facilities to accommodate changing market dynamics, yet another possible cause is the cost and inflexibility of long-term contracts. Said there is.

“Japan may just be looking for better prices, as there are signs that the market will be oversupplied between 2026 and 2031,” Sakumar said.

Secure Qatar Major contracts Last year, we collaborated with a Japanese company on the Northfield Project. The $ 28.7 billion expansion project is the largest project of its kind in the world.

Main engineering and construction Contract The first stage of its expansion was given to a Japanese joint venture Chiyoda Corporation..When Technip..

“In the end, I think the honeymoon between Qatar and Japan is over, but that doesn’t mean the relationship is over. It’s just evolving to meet the dynamics of the new market.”

U.S. turns to Qatar

US President Joe Biden has approached Qatar in recent months to provide gas transport to Europe in case Russia invades Ukraine.

Biden designates Qatar as a major ally other than NATO

Given Qatar’s position as a strategic ally and a major LNG exporter, this move was not surprising. Energy supply was discussed between Qatar’s Amir Sheikh Tamim bin Hamad Altani and the US President at a conference in Washington in January.

But the visit seemed to disappoint Japanese officials — regrets turned to the Biden administration.

When Japanese Prime Minister Fumio Kishida took office last October, he sought a meeting with the White House. President Biden reportedly had other domestic missions, making the meeting virtual.

When Sheikh Tamim and President Biden met, Japanese government officials reportedly Said: “The result of all our efforts” shows that they want the United States to be popular on energy-related issues.

Like Qatar, Japan is a major ally of the United States, 55,000 U.S. military personnel At 85 facilities across Asia. Tokyo also receives over 90% of defense imports from the United States.

Analysts argue that the alleged reaction from Japanese officials is to the Biden administration, and the attention-grabbing US-Japan conference deserves more consideration.

Dr. Christian Ulrichsen, Middle East Fellow of the Baker Institute at Rice University, said, “The more Qatar offers to the benefit of US foreign policy than Japan at this particular point, the more Byden chooses Qatar over Japan. That may not be a problem. “Said for public policy Doha News..

Relations between Qatar and the United States were strengthened last year after the Taliban took over Kabul. At that time, Doha promoted the largest airlift in history and evacuated up to 70,000 Afghanistan and foreigners.

The Gulf states agreed to relocate the US embassy from Kabul to Doha in the event of an incident, and later signed an agreement with Washington to represent US interests in Afghanistan.

This was followed by President Biden’s decision to designate Qatar as a major non-NATO ally (MNNA).

Dr. Andreas Krieg, an assistant professor of security at King’s College London, believes that Qatar’s role as a major LNG producer further enhances its role as a broker in the Gulf countries.

“We have always spoken of Qatar as a soft power broker, repairing relationships and mediating between opposing parties, but LNG itself is a huge piece of software that Qatar has never actually used that way. It’s a source of power, “said Dr. Krieg.

The dynamics of the LNG market continue to change, but have not yet been resolved, but there are no juries on the breaks in Qatar and Japan.

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https://www.dohanews.co/can-qatar-and-japans-lng-marriage-survive-shifting-market-dynamics/?utm_source=rss&utm_medium=rss&utm_campaign=can-qatar-and-japans-lng-marriage-survive-shifting-market-dynamics Can Qatar and Japan’s LNG “marriage” survive the changing dynamics of the market? -Doha News

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