Ukraine Says Qatar 'Ready to Supply LNG'

Ukraine’s president Petro Poroshenko issued a statement after a meeting with the emir of Qatar. His office said March 20 that "extremely important talks on the diversification of gas supply sources" took place during his two-day official visit to the State of Qatar since March 19.

"We agreed that Qatar is ready to provide liquefied gas to us," the President of Ukraine said. He informed that the supply of Qatari LNG was possible through the terminal in Poland, as well as on the Turkish route through the Bosphorus,” said Poroshenko’s statement.   Negotiations on that issue would take place in the near future, he added.  However neither Qatar’s industry and energy ministry nor state Qatar Petroleum (QP) issued any statement.

However it’s evident that Poroshenko met the Emir, Sheikh Tamim bin Hamad Al Thani (see photo below) and that both countries agreed to set up an intergovernmental joint commission on economic, trade and technical cooperation.

Ukraine buys gas from Poland already and, as Polish state PGNiG in January 2018 doubled up its long-term contractual imports from Qatar to 2mn mt/yr, it’s likely that some regasified Qatari LNG is already part of the mix, along with Russian and Polish gas, that PGNiG sells to Ukraine’s state Naftogaz.  It's therefore unclear why a direct contractual relationship with QP would benefit Ukraine, even though Polish state-run Gaz System would probably welcome Naftogaz as a new user of its Swinouscjie LNG import terminal. 

There’s no suggestion in the president's statement that PGNiG might sub-contract some of its Qatari term contract to Naftogaz, or that this would be encouraged by QP. 

The notion of Qatari LNG reaching Ukraine’s Black Sea coast seems unlikely in the medium term. Ukraine has no LNG import facility and, although the Bosphorus is an international waterway, Turkey has in the past voiced concern about LNG tankers passing through Istanbul.  

Russia and Qatar are competitors in the European gas market. The Ukrainian government also said that it and the State of Qatar signed an agreement on military-technical cooperation during the visit. Parts of eastern Ukraine and Crimea have been annexed by Russia.

Poroshenko later March 20 said he also met the Qatar Investment Authority CEO Sheikh Abdullah bin Mohammed Al Thani. The Ukrainian president outlined his country's interest in attracting Qatari investors, including the QIA, a sovereign wealth fund, to sectors such as energy, farming, tourism and recreation infrastructure, shipbuilding, aircraft building, road construction projects, and modernisation of seaports. But his statement included no commitments by QIA, which also issued no related press statement of its own on its website.

Update March 21: Whereas QP issued no statement on its website about Ukraine, it did say that its CEO Saad Sherida al-Kaabi concluded a working visit to New Delhi March 21 where he met Indian petroleum and gas minister Dharmendra Pradhan and executives of Petronet, Indian Oil, Gail and Reliance Industries. QP says that India has imported more than 10mn mt/yr from Qatar in recent years, inclusive of an 8.5mn mt/yr long-term supply contract to Petronet, making India one of its largest markets. Pricing of the latter was renegotiated downwards two years ago and the volume increased from its original 7.5mn mt/yr volume. QP needs to build up new market share, as it is at risk of traditional importers in east Asia and southern Europe lapsing or reducing their Qatari LNG contract volumes in the early 2020s, as they step up imports from the US, Australia and new export regions like East Africa..

Ukraine's president Petro Poroshenko (left) and the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani (Photo source: Ukrainian presidency)