EXCLUSIVE: Egypt allows Qatari LNG vessels to pass

12 June 2017

Qatar LNG meets about two-thirds of Egypt’s requirements

Vessels bound for Egypt carrying Qatari liquefied natural gas (LNG) are continuing to access the Suez waterway without any interruptions, tanker data shows.

The Bahamas-flagged Al-Ruwais LNG tanker carrying Qatari cargo managed to sail past the Suez Canal without any issues. The Al-Thakhira tanker, which also carries Qatari cargo under the Bahamas flag, was also reported nearing the Suez Canal at 10am on 12 June, according to the tanker data.

Egypt, along with Saudi Arabia, the UAE and Bahrain, has imposed air, land and sea blockades on Doha. Cairo is one of Qatar’s four regional clients, which also includes the UAE.

The Gulf state supplies about two-thirds of Egypt’s requirement of LNG. In 2016, Cairo imported 4.4 million tonnes, or 63 per cent of its LNG needs, from Qatar.

In the immediate aftermath of the current political crisis, a tanker from Qatar bound for the UK avoided the Suez Canal and diverted course around the African continent instead.

UK/Dutch major Shell also swapped a shipment bound for the UAE carrying Qatari LNG with cargo from the US, following the blockade against Doha.

LNG carriers typically fly under different flags of convenience, such as that of the Marshall Islands, to avoid certain regulations and operating costs.

“LNG carriers typically don’t sail under the Qatari flag,” says Homayoun Falakshahi, senior upstream analyst at energy consultancy Wood Mackenzie. “They sail under the flag of the Marshall Islands or the Bahamas, for example. The fact that these ships don’t sail under the Qatari flag may just be enough for Egypt to not stop importing from Qatar and for Qatar to not stop exporting to Egypt.”

“When it comes to the energy business, it would be business as usual,” he adds.

State-owned Qatar Petroleum said in a statement that “uninterrupted supplies would continue”.

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