QATAR BELIEVES USG IRAN POLICY HURTING DOHA'S GAS

C O N F I D E N T I A L SECTION 01 OF 02 DOHA 000128

SIPDIS

E.O. 12958: DECL: 02/18/2019
TAGS: ENRG EPET EINV ETTC PREL QA IR RU EK BL VE
PL
SUBJECT: QATAR BELIEVES USG IRAN POLICY HURTING DOHA'S GAS
INTERESTS

REF: A. 2008 DOHA 811

B. DOHA 27

DOHA 00000128 001.2 OF 002


Classified By: Amb. Joseph LeBaron for Reasons 1.4 (b) and (d).

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(C) KEY POINTS
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-- Qatar is aware of U.S. sanction laws on Iran, Energy
Minister Al-Attiyah told visiting EEB DAS Doug Hengel.
Al-Attiyah complained that the U.S. should not let politics
influence business and said Qatar had never intervened in
U.S. politics.

-- Al-Attiyah sees the Gas Exporting Countries Forum
functioning like a club with no real impact on gas market
dynamics. Qatar pursued the secretariat for Doha to avoid it
being established somewhere that could negatively impact
Qatar's interests.

-- He dismissed the idea that the gas markets are developing
in ways which would allow cartel-like behavior.

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(C) COMMENT
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-- Significantly, Al-Attiyah did not mention that many of
Qatar's long term LNG supply contracts include a provision
that permits Qatar to divert supplies to the spot market if
spot prices rise far enough above the long-term contract
price.

-- Al-Attiyah is quick to dismiss the notion that the gas
market could develop in ways which would allow price or
supply manipulation in the short-term. His remarks do not
totally ring true, however, as Qatar clearly thinks there is
some value in talking to other major gas exporters about how
to increase coordination.

-- Al-Attiyah obviously resents U.S. laws/sanctions on Iran,
particularly because he perceives them as political meddling
in a business issue. Despite his concurrent title of Deputy
Prime Minister, Al-Attiyah is personally focused almost
exclusively on only the business aspects of the energy
industry, and how to make the most money for Qatar.

End Key Points and Comment.


1. (C) EEB DAS Doug Hengel met February 16 with Minister of
Energy and Industry Abdullah Bin Hamad Al-Attiyah. Also
attending the meeting for Qatar were Minister of State for
Energy and Industry Dr. Mohammad Al-Sada, Minister
Al-Attiyah's Office Director Abdulaziz Al-Malki, and QP
Director of Oil and Gas Ventures Saad Sherida Al-Kaabi.
Attending for the USG were Ambassador and Econoff Fabrycky.

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Iran: Don't Mix Politics with Business
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2. (C) When Iran and the Iran Sanctions Act were raised by
DAS Hengel, Al-Attiyah demurred and clearly tried to avoid
talking about any specifics of the issue. As he had with
Ambassador in November (Ref A),Al-Attiyah cited Qatar
Petroleum's problems with U.S. laws on Iran vis-a-vis spare
parts for Gulf Helicopters, which had been using Bell
Helicopters before it switched to Augusta (an Italian
company) to avoid having to resupply via the U.S. Al-Attiyah
complained that the U.S. should not let politics influence
business and said Qatar had never intervened in U.S.
politics. He concluded by noting that many American
companies are "unhappy with the State Department" due to USG
regulations on Iran-related contacts.


3. (C) Note: In a separate meeting on February 18, Qatar
Petroleum International CEO Nasser Al-Jaidah said that the

DOHA 00000128 002.2 OF 002


proposal for a joint venture with Iran was an idea "from the
top about how to neutralize Iran" (i.e., senior Qatari
leadership's attempt to deal with Iranian pressure on Qatar).
Al-Jaidah said there is no active deal, just a concept
which, in his opinion, will never see reality. End Note.

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Qatar's Contracts More Important than Any "Troika"
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4. (C) Asked by DAS Hengel about Qatar's intentions in its
public cooperation with Russia and Iran, Al-Attiyah responded
by citing Qatar's key role in supplying Asia, Europe, and
North America, and reiterated that Qatar does not mix
business with politics. He said Russia is "a different
story." Pressed by the Ambassador on how public statements
regarding a Russia-Iran-Qatar gas troika suggest
collaboration, Al-Attiyah claimed the troika concept is an
idea pursued by the press, and "the truth of the business is
to end up with contracts" (i.e., successful individual
country efforts are paramount to any multilateral
collaboration).

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Limited Market Role for Gas Exporting Countries Forum
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5. (C) Al-Attiyah claimed Washington should not be concerned
by the Gas Exporting Countries Forum's (GECF) recent
initiative to strengthen its organization and establish a
secretariat. Referring to the December 2008 meeting in
Moscow, Al-Attiyah said Qatar pushed Doha as the location for
the secretariat because he "was concerned about the other
places the headquarters could be." Moreover, he said Qatar
is working within the group to keep gas issues separate from
politics. He criticized Russia for trying to rig the
December vote on the headquarters location by quickly making
Equatorial Guineau a voting member, when that country had
only come to the meeting as an observer. Al-Attiyah claimed
that Egypt voted for Qatar as the location but Bolivia and
Venezuela both voted for Russia.


6. (C) Al-Attiyah denied, as he has previously, that the GECF
has any cartel-like intentions or even capabilities.
Although spot sales are growing, Al-Attiyah claimed it would
take 30-40 years for a significant spot market to develop,
and in the meantime long-term contracts would continue to set
market dynamics. Al-Attiyah sees the forum as functioning in
the near term "like a club," with a focus on developing
technology and investment opportunities.

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Qatar Hosting EITI Conference to Help Clean-up Industry
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7. (C) Al-Attiyah noted that Qatar is considering becoming a
candidate country for the Extractive Industries Transparency
Initiative (EITI). (Note: Qatar is currently hosting the 4th
EITI conference in Doha, though it has not publicly announced
any intention to join the EITI.) The Minister said he is
supporting the conference as part of an effort to push the
GOQ to improve its transparency. Moreover, Al-Attiyah
claimed that Qatar wanted to "invite the worst of the worst"
to help try and clean up the energy industry worldwide.

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Europe Needs More LNG Terminals
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8. (C) In passing, Al-Attiyah noted that he is advising
European countries, particularly Germany, to build more
liquefied natural gas (LNG) receiving terminals to help with
supply security issues. Qatar is also in "serious
discussions" with Poland on gas exports and construction of a
terminal there (NFI).


9. (U) DAS Hengel has cleared this cable.
LeBaron