Qatar says low prices prompted merger of LNG firms RasGas and Qatargas
LNG-producing giant Qatar is to merge its state-owned natural gas firms Qatargas and RasGas to cut costs to respond to lower energy prices, Qatar Petroleum (QP) chief executive SaadSherida al-Kaabi has announced.
The merged company, to be known as Qatargas, will cut jobs and costs, Mr al-Kaabi told a press conference in Qatar on Sunday.
“As an outcome of this a cost reduction will be realised, which will make us more competitive in the market,” he said, adding that the merger would save Qatar “hundreds of millions of dollars”.
“It’s one business that will do the same thing,” he said. “Putting it all in one place gives you a much bigger advantage in marketing.”
In October, QP launched Ocean LNG to market future international LNG supply sourced outside Qatar. It is not clear whether QP will bring that business closer to the new Qatargas.
It is also unclear, at this stage, how the merger will affect state-owned Qatar Gas Transport Co (Nakilat), which delivers both companies’ cargoes and which commands a fleet of 63 wholly or part-owned LNG carriers plus four LPG carriers.
Nakilat is bringing in-house the management of that fleet, in a phased handover from Shell.
Industry sources have expected Qatar to merge its two LNG businesses for some time. Like other energy giants, Qatargas and RasGas need to cut costs, to reflect lower prices and renegotiated long-term supply deals.
QP expects the merger to take 12 months. It will restructure the businesses with immediate effect.
