QATARI ENERGY MINISTER SETS STAGE FOR GAS

C O N F I D E N T I A L SECTION 01 OF 02 DOHA 000428

SIPDIS

E.O. 12958: DECL: 07/01/2019
TAGS: ENRG EPET EINV PREL TRGY QA RU IR
SUBJECT: QATARI ENERGY MINISTER SETS STAGE FOR GAS
EXPORTERS' FORUM IN MEETING WITH AMBASSADOR

REF: DOHA 27

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

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(C) KEY POINTS
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-- In a meeting with Ambassador just prior to the June 29
opening of the Gas Exporting Countries Forum (GECF)
Ministerial in Doha, Deputy Prime Minister and Minister of
Energy Abdullah Bin Hamad Al-Attiyah downplayed, as usual,
the scope of the forum's agenda, denying that the members had
the intention or capability to pursue cartel-like
behavior.

-- Early indications on the forum suggest that the GECF
members (at least 10 of 14 attended the Doha meetings) are
still struggling with a raison d'tre and in disagreement
about objectives.

-- The main item of business was to elect a Secretary General
for the group, but the decision was postponed until
the next GECF ministerial, slated for December in Doha.

-- Separately, Al-Attiyah lamented to Ambassador the way CO2
emissions are calculated internationally, noting that
relying on a per capita emissions basis works to the
disadvantage of small countries with energy-intensive
activities such as Qatar.

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(C) COMMENTS
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-- Al-Attiyah's assertions to Ambassador and other U.S.
officials about the GECF's limited scope usually rest on
the premise that the natural gas industry's long-term
contracts and regional distribution networks make
cartel-like behavior impossible. While true that the natural
gas market is different than oil, these assurances
ignore some trends moving natural gas in the direction of a
global commodity. Chief among these trends is the
increasingly important role of Qatar and other liquefied
natural gas (LNG) producers in providing swing supply and a
growing spot market.

-- The GECF's inability to decide on a candidate for
Secretary General undercuts its influence and,
consequently, the organization's prospects for enhancing
coordination among members.

End Key Points and Comments.

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MINISTER'S VIEWS ON GECF
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1. (C) Al-Attiyah told Ambassador, as he has previously, that
the GECF is not intended or structured "as the press
talks," and the organization will never concern itself with
contracts or supply matters. He projected that natural gas
will not see a real spot market develop for years, and noted
that Qatar prefers long-term contracts anyway.


2. (C) The Minister underscored that most LNG is based on
long-term, take-or-pay contracts. Qatar is a "long-term
thinker" and only sells a small amount of excess supply on
the spot market. (Al-Attiyah explained Qatar's recent sale
of about 50 LNG cargoes to a U.S. firm on a spot basis by
noting that delays to the start-up of the hurricane-damaged
Golden Pass receiving terminal in Texas meant that
newly-started production did not have a committed
regasification facility to go to - and was thus freed up for
spot sale.)


3. (C) Al-Attiyah noted there were between 4-6 candidates for
GECF Secretary General but he gave no indication
whether Qatar was nominating someone or whom Qatar would
support. He also refused to be drawn out on whether the
Secretary General position would have a structured rotation
with fixed terms.

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GECF ATMOSPHERICS

DOHA 00000428 002 OF 002


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4. (U) The GECF events in Doha covered two days - an
Executive Committee meeting on June 29, and a
ministerial-level gathering on June 30.

-- 10 of the GECF's 14 members attended (according to press):
Algeria, Equatorial Guinea, Egypt, Iran, Libya,
Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.
Both Kazakhstan and Norway attended as observers, while the
UAE attended as a guest.

-- According to press accounts, the main item of business was
to elect a Secretary General for the organization. However,
participants were unable to reach consensus and postponed the
decision to the GECF's next meeting, which will
reportedly be held in Qatar this December.

-- Iran presented a nominee, Hojatollah Ghanimifard, who is
currently the Acting Vice President for Investments of the
National Iranian Oil Company. Publicly available information
suggests Ghanimifard is a technocrat.

-- According to a detailed Russian press report from
Kommersant Online, Russia had extracted a quid pro quo at
the December 2008 GECF meeting which was to give a Russian
the post of Secretary General in exchange for basing the
organization in Doha. According to this same report, Russia
came to the conference without a candidate as
several of its potential nominees declined to stand for the
post. A separate Arabic report from RIA Novosti, a Russian
News Agency, indicated Russia pressed to postpone the
Secretary General selection because of Russia's inability to
find a suitable candidate.

-- The Forum did appoint Qatar's Minister Al-Attiyah as
President of the Forum, with Algeria's Minister of Energy
and Mines Chakib Khalil as an alternate. The President
appears to have no role outside presiding over the
ministerial meeting.

-- (C) The Netherlands' application to join the GECF as an
Observer was approved. Dutch DCM Jeannette Nieuwenhuijis
told Econoff Fabrycky June 28 that the Netherlands would not
be sending a representative to this week's meeting.
Qatari Energy Minister Al-Attiyah met with Dutch Economic
Affairs Minister Maria Van der Hoeven in mid-June to discuss
importing Qatari LNG into planned Dutch regasification
terminals, according to press reports.

-- (U) The accession of the UAE to the forum was also
approved at the ministerial, according to Al-Attiyah.

-- (U) Opening the forum, Al-Attiyah spoke in generalities
and platitudes, noting that the forum is a "platform for
cooperation." He reviewed Qatar's leading role in the LNG
market, and underscored the effects of the global economic
crisis on the energy industry. (A full summary of
Al-Attiyah's remarks and other official coverage of the
ministerial is available at the Qatar News Agency website -
www.qnaol.com).

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CAP-AND-TRADE
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5. (C) Separately, in his meeting with Ambassador, Al-Attiyah
referenced his recent trip to Washington and meetings with
Congressional leaders, noting that Qatar is not against
cap-and-trade schemes per se, but does have "reservations"
about the way CO2 emissions are calculated internationally.
Al-Attiyah worried that collecting data
on a per capita basis severely disadvantages small states
like Qatar, Singapore, and others. He noted that their CO2
output is insignificant compared to major polluters like
China, but with the current data streams, Qatar looks like
a bad polluter and might be subject to onerous restrictions
via cap-and-trade schemes. Al-Attiyah called for an
emphasis on absolute values of CO2 emissions. The Minister
underscored Qatar's emphasis on clean energy sources,
noting they are conducting studies on carbon capture.
LeBaron