OilPrice: China may regret not taking all gas from Russia, but contacting Qatar
Given its geographic location next door to Saudi Arabia on the one hand and Iran on the other, Qatar has long been playing delicate diplomatic tightrope walking between the two key Middle Eastern countries and their sponsoring superpowers. In the case of Saudi Arabia, its key backer for decades has been the United States, and for Iran, Russia and then China.
Recently, Saudi Arabia also seems to have shifted further along the China-Russia axis. Despite this, however, Qatar appears to be largely sticking to the informal but firm deal it reached with the US to provide the EU with vital gas supplies to replace those lost from Russia. About this bifurcation in the position of Doha, which took a huge amount of money in the form of investments from China and at the same time “changed” with Washington, writes OilPrice resource expert Simon Watkins.
In particular, last week a large company China Petroleum & Chemical Corporation (Sinopec) signed an agreement with QatarEnergy to acquire a 1,25 percent stake in a gas production expansion and liquefaction project. The project is key to Qatar's plans to increase LNG export capacity to 110 million metric tons per year by 2026 (currently 77 million). An increase in gas deals between China and Qatar, as well as a 1,25 percent stake in the NFE expansion project, should have given Beijing assurances that it would receive raw materials as a priority. But everything turned out to be much more complicated.
Doha has a common business with the American Conoco Philips. At the direction of the US government, one of its subsidiaries will purchase LNG from Qatar and then deliver it to a regasification terminal in Brunsbüttel, Germany, which is currently still under development. There is no doubt that once the infrastructure is ready, Qatar will obey the US request and supply the gas already actually bought by China to Europe. In this case, Beijing in vain hopes for long-term cooperation with the Middle Eastern state and, trying to diversify supplies, postpones the construction of the second line of the Power of Siberia from the Russian Federation. The PRC may yet regret this decision. There may not be a better time to take all the necessary raw materials from Russia.
The hydrocarbon diversification strategy of the Celestial Empire is bursting at the seams, its calculations have stumbled upon fierce geopolitical behind-the-scenes resistance from the United States, not only in Qatar. It is obvious that Beijing's attempt to play its financial muscles on the Western front was not successful - the West is operating without defeats in its own field.
- Used photos: pxhere.com