LNG supply routes ‘to be unaffected’ by Syrian flare-up

Qatar’s LNG supply to the world will not be affected if the US launches an attack on Syria, a senior official has said.
When asked whether there will be any consequences on the LNG supply routes going out from Qatar in the event of a US attack on Syria, Nakilat’s managing director Mohamed Ghannam said: “I see no reason (for it to get affected in any way).”
According to him, Qatargas and RasGas will be able to honour their commitments for the supply of LNG and Nakilat will be able to deliver the cargoes as scheduled . “There is no reason to worry about.”
Qatar has signed long-term agreements for the supply of LNG with countries, including Japan, South Korea and India.
Ghannam spoke with Gulf Times on the sidelines of a recent Nakilat event. Qatar Gas Transport Company (Nakilat) is a Qatari-listed shipping company established to own, operate and manage LNG vessels and to provide shipping and marine-related services. It is considered the largest LNG ship owner in the world with more than 54 LNG vessels.
Other experts say that while it is true that it is “unlikely” that the “impending” US attack on Syria would engulf the entire region in turmoil, history of the Middle East shows that disruptions in hydrocarbon supply have occurred in the past in the event of conflict in the region.
For example, they argue that in the aftermath of the US invasion of Iraq in 2003, Iraqi oil supplies were badly affected; there was a gross loss of around 1.2bn barrels of oil between March 2003 and June 2008.
Dr Mehran Kamrava, director, Centre for International and Regional Studies at the Georgetown University’s School of Foreign Service in Qatar, agreed with the Nakilat official and said that he did not believe there would be any serious interruption in LNG and oil supply if the Syrian conflict were to flare up.
“The only way this would happen is if Iran is somehow involved, which at this point is an extremely remote possibility. Similar to previous cases that occurred with the US invasion and occupation of Iraq or the Libyan civil war, the only effect is likely to be a rise in the insurance premiums for tankers crossing through the Gulf. Otherwise, the supply routes themselves will most likely not be affected at all,” Kamrava said.
Recently, the Bank of America Merrill Lynch said in a report that a prolonged Syrian conflict could mean an oil price spike to $160 a barrel.
Siddik Bakir, an energy analyst from the global information company IHS based in the US, said he too thought it was “highly unlikely” at this stage that the conflict in Syria would spill over to such an extent that it would affect LNG and oil supply routes passing through the Strait of Hormuz.
“Iran will remain a key ally of the Bashar al-Assad regime in Damascus but that does not mean that Tehran will shut the Strait of Hormuz, even if the crisis in Syria escalates further,” he said.
Bakir recalled that Iran had also threatened to shut the straits in early January 2012 in reaction to a potential Western-backed Israeli military attack on Tehran’s nuclear programme.
“But then as well Iran stayed away from disrupting the most important maritime transport way in the region. We must not forget that Iran itself depends on the maritime shipping route for its own oil export,” he said.
The analyst further added that the recent turmoil in Egypt too had not resulted in any supply disruption through the Suez Canal.
Source: Gulf Times