Qatar Says European Moves to Cap Gas Prices Are Hypocritical

In an interview with Bloomberg TV, Qatar's energy minister Saad Al Kaabi slammed European proposals to set limits on the price of natural gas, calling them "hypocritical."

The European Commission is proposing a cap on gas prices using a dynamic price mechanism. This could be in place as soon as this winter, in an effort to curb volatile fuel costs.

But Kaabi said that interfering in markets contradicts the competition rules that Europe previously applied to producers. Kaabi is also the chief executive of the world’s biggest liquefied natural gas producing company, Qatar Energy. He said on Sunday that the free market is always the best solution.

Capping the price of natural gas could reduce incentives to invest in gas production and deprive some buyers of supplies. Rival importers may attract cargoes that would otherwise go to Europe by offering just one cent more, he said.

The European Commission closed its antitrust investigation into Qatar's deals to supply LNG to European companies in March. The probe was established in response to concerns that the producer's supply agreements restricted the ability of EU gas importers to sell the LNG in alternative destinations within the bloc's internal market.

Europe's energy difficulties are expected to continue for at least the next five years, according to Qatar Energy Minister Mohammed al-Sada. Al-Sada said that if winters are harsh and Russian pipeline flows don't return to normal levels, Europe will continue to face challenges. Qatar Energy is currently in negotiations with German companies RWE AG and Uniper SE for LNG supplies, and is in advanced talks with some Asian buyers.

European leaders have been unsuccessful in their attempts to secure more volumes of natural gas from Qatar this year. Qatar has been producing natural gas beyond its installed capacity for years, making it difficult for European leaders to secure the volumes they need.

Qatar had pledged to refrain from diverting cargoes away from Europe, even though it is contractually allowed to re-route supply. This was after Russia’s invasion of Ukraine in February sent European gas prices rocketing. Qatar is sticking to that pledge for now, but “nothing is permanent,” said Kaabi. “We have the right to do what we like with our volumes. But it was a promise that we made for a certain duration. When it’s appropriate for us to divert, we will.”

Qatar plans to increase its output capacity by more than 60% to 126 million tons per annum by the end of the decade. This will be achieved through the North Field East development, which is scheduled to start up in 2026, and North Field South, which will be ready to export in 2027.