Qatar warns of gas price spikes as it forges ahead with expansion

Qatar warns of gas price spikes as it forges ahead with expansion

Qatar's energy minister has warned gas importers they face winter spikes in energy prices unless they sign up to long-term contracts as the slowdown in the US shale industry and the financial challenges faced by international oil companies put a freeze on global projects.

Saad al-Kaabi, who is also chief executive of state-owned energy company Qatar Petroleum, told the Financial Times that at "least half“ of proposed global liquefied natural gas projects scheduled to start in the coming years "will not happen“.

Speaking after QP announced its final investment decision on the $28.75bn expansion of its North Field, al-Kaabi pointed to the constraints faced by energy groups battered by the slump in oil prices last year and the pressure on companies to invest more in renewable energy and less in fossil fuels.

"There isn't a lot of money that will be helping oil and gas companies,“ he said in an interview. "But the pure economics of these projects do not fly any more at low oil prices.“

He said that QP, which is expanding its production capacity from 77m tonnes of LNG per annum to 110m by 2025, could survive at $30 a barrel of oil compared to a sustained price above $60 a