Friday March 26, 2010 06:28:17 AM GMT
By Muriel Boselli and Marie Maitre
PARIS, March 25 (Reuters) - Qatar does not plan to cut output in a bid to support global gas prices, Qatari Minister of State for Energy Mohammad al-Sada said on Thursday.
Major pipeline gas exporter Algeria plans to ask other big gas producers to stop flooding markets with extra spot natural gas deliveries when they meet next month.
But Qatar, the world's biggest liquefied natural gas (LNG) exporter, plans to keep up production and sees the market recovering in a few years anyway.
"Our projects are long term, between 20 and 25 years, and they are linked to oil prices," he said in response to a question on Algeria's view that major gas exporters should reduce supply of spot gas deliveries to support prices.
"We cannot reduce the quantities contracted," al-Sada told reporters on the sidelines of a Qatari forum in Paris.
"We are ramping up (production)... We believe that in the coming two or three years there will be a shortage of gas and we believe demand will increase and that is why we decided to invest in gas to supply the world."
Spot LNG prices tumbled last year to around $4 per million British thermal units from record highs of around $22 per mmBtu in 2008. Demand is recovering and new importers emerging, but large rises in output capacity will likely keep the LNG market oversupplied for the next few years, analysts say.
Qatar, whose economy relies heavily on gas sales, sees long term sales growth beyond the current glut of gas.
"We want a 100 years of steady production without a need for expansion or drilling. We are not a short term investor," he said, adding that the Gulf country would not make a decision on whether to raise output at its North Field until 2014/15.
Earlier in the day Prime Minister Sheikh Hamad bin Jassim al-Thani said Qatar would raise its LNG production capacity to 77.4 million tonnes per year by 2011 from 56 million currently.
But Al-Sada said Qatar was "at the peak" of its investments in the energy sector. "That is why we need a fair price for gas," he said.
Asked about Qatar's oil production following the completion of an expansion at the Shaheen field, Al-Sada said the country would raise its capacity to one million barrels per day "in the next two years" from current output of 800,000 bpd.
Al-Sada also said that $80 per barrel was a "fair price" for oil and that anything above that level would be detrimental to the recovery of the global economy.
"Oil prices hovering around $80 a barrel is good enough to sustain development (of energy investments). We don't want to hurt the economy." (Reporting by Marie Maitre and Muriel Boselli, editing by Anthony Barker)
Source: http://www.forexyard.com/en/news/Qatar-doesnt-plan-to-cut-gas-output-to-buoy-price-2010-03-25T172830Z-UPDATE-1
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