CNBC’s full interview with Qatar’s Energy Minister

Saad Sherida Al Kaabi, Qatar’s Energy Minister and CEO of Qatar Energy joined CNBC’s Dan Murphy in Doha to discuss U.S. President Donald Trump’s visit to the Middle East, and his outlook for the LNG market.

Outlook on Oil Prices and Industry Investment

• The Minister believes that oil prices being too low are not good for the oil and gas sector.
• For oil and gas companies to invest, they need a reasonable price that provides reasonable revenues.
• He suggests a price window between $70 and $85 is reasonable to sustain fields and development, as maintaining existing reserves becomes more expensive over time.
• If prices go too high, it is detrimental to demand and damaging to the industry.
• A range like $75 to $85 is considered healthy for the long term.
• Remaining below $70 for a long time would lead to many companies being out of the market regarding investment.
• While some companies can weather the storm for a while, the majority of smaller industry players will not be investing.
• Eventually, even larger companies like Exxon, Shell, and Total will start reducing their capital expenditure if prices remain low.
• This reduction in capital expenditure could ultimately lead to a shortage in supply.
  
  

Outlook on the LNG Market

• Regarding the outlook for LNG, the Minister noted that when Qatar decided to proceed with the Northfield expansion in 2017, many analysts thought they were "crazy" due to projections about long-term LNG pricing and the expected impact of alternative energy and the "green push".
• However, Qatar anticipated that the market would need a lot of gas in the future.
• The Minister believes that the market analyst talk about a gas glut has disappeared.
• This is because delays in most LNG projects that were expected to come online have pushed back the potential glut.
• He believes there will not be a glut and suggests there could even be a shortage in 2030.
• Despite the large amounts of gas currently coming from Qatar, Australia, and the United States, his confidence in avoiding a glut stems from anticipated economic growth.
  
  

Role of Natural Gas in the Energy Mix

• The Minister believes that gas is absolutely needed as a base load maybe for another century.
• While renewables are needed and there is "no issue with renewables," their intermittency cannot make up for the huge growth in power requirements.
• Sustained power is needed for growth.
  
  

Supply and Demand Dynamics & Key Markets

• The Minister believes there are plenty of markets that need gas.
• Many countries are starting to develop their gas sectors and need to build LNG receiving terminals.
• Examples include countries with huge population and economic growth like Vietnam and the Philippines.
• India has an ambition to reach 15% of their power from gas, up from the current 7% or 8%. If they reach this ambition, India would need a huge amount of gas, potentially around 120 million tons.
• China has a similar ambition to increase its gas requirements.
• Japan and Korea also have requirements for additional energy.
• Regarding demand from China and India, the Minister stated he has not seen anything peculiar about recent demands for lower prices or more favorable terms. Buyers always ask for cheaper prices, and sellers always ask for more.
• He described discussions with Chinese and Indian buyers as very cordial and noted negotiations can take varying amounts of time.
  
  

Competition with the United States

• The Minister is not worried about the US being a competitor.
• He believes plenty of gas needs to come into the market.
• The US is the number one energy exporter and will be the largest for a long time.
• Qatar will be the second largest for a very long time.
• He views the US and Qatar as serving different markets.
• He considers the competition to be very healthy and beneficial to buyers as it provides more suppliers.