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UK’s new gas saviour during supply crunch is Qatar

December 3, 2021 at 10:29 pm

Qatar’s production of liquefied natural gas and gas-to-liquid, administrated by Qatar Petroleum in Doha, on 6 February 2017 [KARIM JAAFAR/AFP/Getty Images]

After gas shortages in the UK have led to soaring high prices, Qatar eyes an opportunity to strengthen ties with the UK in terms of gas supply. It is clear that Qatar sees Brexit as a chance to develop huge gas investments in the UK. The Gulf state already has $50 billion of investments in Britain and delivers 90 per cent of Britain’s imports of liquefied natural gas, according to Qatar’s Ministry of Energy.

According to a report published by Financial Times, last month, Downing Street initiated LNG diplomacy talks with their Qatari counterparts on diverting four energy tankers to Britain.

Undeniably, Qatar, as the world’s largest exporter of liquefied natural gas, pursues highly extensive LNG diplomacy in the region. It is clear that Qatar invests in the UK with launching LNG terminals being the majority owner of South Hook LNG terminal in Wales while the UK’s energy and services company Centrica has a long-term Qatari LNG import agreement for delivery into the Isle of Grain terminal.

Meanwhile, the LNG relations between the two nations go back to Theresa May’s term. In 2008, Britain received the first LNG ships from a dock at South Hook terminal near Milford Haven, one of Europe’s largest LNG terminals, which is owned by Qatar.

Most likely, Qatar LNG diplomacy in the UK might end Great Britain’s energy supply crisis, especially after Brexit. The government says there is enough energy supply; the biggest crisis is a shortage of truck drivers. Yet, the scarcity of drivers in the UK is not only a regional problem. Truck driver dilemma was a global problem even before Brexit, as nobody wants to be driver with less income,  plus with Brexit visa problem. That’s why the UK is now inviting drivers to the country from Europe to come back with some financial benefits. This whole scenario with post-Brexit shortage of truck drivers highlights one specific issue that the UK needs partnership with other countries like Qatar, not only for dry pumps but also not to be an energy isolated country. Therefore, this driver shortage triggered the initiatives to build better ties with Qatar. That is why it is not a coincidence that Boris Johnson met with Qatari Shaykh Hamad bin Khalifa Al-Thani last month in Glasgow at the Climate Change Summit to sign mega energy projects.

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The UK is really aware that beside LNG, green technology investments also play a bigger role for the mutual relations between the two countries in the post-Covid era. During COP26 in November, Qatar and Rolls Royce signed an agreement to generate at least 10,000 climate-tech jobs by 2040. This is the biggest green agreement of Rolls Royce’s history with a multi-billion pound project to launch groundbreaking centres in Doha and London. I believe including the Shard skyscraper and Savoy Hotel, this climate-tech hub will be Qatar’s high-profile investment in the UK.

Meanwhile, according to a Qatari diplomat who talked to Middle East Monitor at COP26, the UK’s biggest challenge is minimal storage capacity. “In the long term, if storage problem is not solved, even Qatar’s energy supply will not be helpful to control higher energy prices.” the diplomat highlighted.

To sum up, it is always easy to draw a rosy picture in term of diplomatic relations, but when it comes to pipeline diplomacy or energy diplomacy, readiness on technological capacity and investments clarifies your position. Officially, Qatar reaffirmed its commitment on the United Kingdom’s gas market for 25 years from mid-2025, yet the UK needs huge energy storage capacity with its own terminals, too.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.