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The discussion about Iranian oil on or off the market is a sideshow compared to the platonic shifting in the energy space. Yes, Iranian embargoes by European countries may have a slight short-term influence on world prices, but three years from now it won’t even be remembered. Increased European sanctions are scheduled to begin in July.

Iran may have to take less for its oil. However, it’s naive to believe Iran will not find a willing buyer. It’s simple economics and it trumps the will of politicians every time. All it takes is one consuming nation with the capacity to buy oil on the cheap. It’s difficult to even imagine a heavily discounted price as the list of countries willing to buy at a small discount is well beyond the capability of Iranian production. Countries including India and China may individually totally subscribe to the Iranian production, let alone all the other countries more than happy to expand or begin buying discounted Iranian energy. (Read why I expect oil to fall under $75.)

Moreover, current oil exports from Iran are estimated to be at 10-year-plus lows. Any impact from disruptions in Iranian oil will be small. OPEC’s official output target is 30 million barrels per day but most believe OPEC is overproducing now and will continue to do so.

Again, don’t expect Iran to close up the lemonade stand and bend to the will of U.S. and Europe. The only real question is if U.S. and European leaders are downright dumb enough to believe what they are doing will have a policy-changing impact on Iran, or if they believe the public is dumb enough to believe it. If both, I would not be surprised.

Tracking Funds

Oil prices are under so much pressure that even after the largest weekly gains this year in the S&P 500 Index ETF SPY(SPY_), oil as represented with United States Oil Fund(USO_) closed marginally higher at $31.80, a gain of 1.1%.

SPY closed near the highs of last week and the previous two weeks, completely erasing the losses from last week. Even so, USO’s close was below the lows from two weeks ago and near the bottom of the previous week. With the recent selloff in USO, SPY’s rocket move higher was hardly noticed by oil and I wouldn’t doubt a piece of paper hitting the trading pit floor was one of the more rambunctious sounds experienced compared to trading SPY. (Read about natural gas displacing petroleum.)

USO appears oversold on the daily chart based on technical analysis but make no mistake, the relationship between SPY and oil is decoupling. USO is circling the event horizon (point of no return near a black hole) and will soon fall in. Not all energy stocks are oversold, and the S&P Energy Select ETF XLE(XLE) represents energy producers and recently bounced off of lows.

Companies

Exxon Mobil (XOM), ConocoPhillips (COP), Marathon oil (MRO), BP(BP),Chesapeake Energy(CHK), Sandridge Energy(SD), Kodiak Oil & Gas(KOG), Cheniere Energy(LNG) profit from natural gas, oil and or refined product sales. All companies have international pricing-related exposure, and Europe is likely to continue to drag earnings, but at least provide greater margins. Transportation costs, current shipping lanes and lack of current demand for energy is a recipe for highly variable and localized energy costs.

Exxon Mobil is currently trading near the 200-day moving average, after breaking below for the second time; first in May and now again in June. Also Kodiak, recently off 2012 lows after triggering an oversold signal a week ago, is running into technical analysis headwinds. Cheniere Energy bounced off the 200-day moving average last week, but appears ready to test 2012 lows soon again.

ConocoPhillips is slightly weaker from the May 1 spin-off of Philips 66. Chesapeake Energy certainly has its share of news lately. Because natural gas prices are trading at yearly lows, a lot of volatility can be expected, especially in the near-term before demand ramps higher.

Natural Gas

As oil prices move toward and below $75, natural gas prices will still remain very cheap relative to diesel and gas. Diesel and gas refinery operations, currently in high demand are keeping a greater share of the crack spread, keeping prices at the pump from falling. Refining limitations will distort the correlation between oil prices and pump prices, while natural gas continues to demonstrate price superiority.

Natural gas production in North America gas tracked with United States Natural Gas ETF (UNG) is part of the reason long-dated oil futures are trading at a discount relative to shorter term contracts. With so much energy available and natural gas at prices comparable to about half the cost of gasoline and diesel, it’s just a matter of time before real meaningful conversion takes place.

There are companies dedicated to producing engines and infrastructure to make natural gas refueling stations as common as diesel is today. Clean Energy(CLNE) has operations in refueling stations, systems, and vehicle conversion technology. Cummins(CMI) and Westport’s(WPRT) joint venture “Cummins Westport” builds the engines for long haul truck operators and others to use natural gas instead of diesel. Cummins Westport is not alone; both Ford Motor(F) and General Motors(GM) are producing vehicles capable of using natural gas as their fuel.

It’s Ford and General Motors vehicles that really make the case for falling future gas prices. As companies like Clean Energy produce increasingly more public refueling stations (about half are public), Ford and General Motors will have an easier time marketing vehicles tied to natural gas.

The major automakers are not able to turn on a dime to produce natural gas vehicles and even if they could, there is a refueling location issue (Clean Energy is working full speed along with other smaller companies to solve this issue), but they don’t need to start selling the vehicles yet.

As long as the wheels are in motion (which they are) oil prices have little reason beyond temporary catalysts to trade higher. The forward-looking nature of the stock market has impacted more companies as well. (Read why I believe gold is well on its way back to $1,200 an ounce.)

As the cost of energy falls, just about every product in the market will have deflationary pressure. Take a box of macaroni and cheese, for example. The actual food product cost is 30% of the cost of energy into putting the box of food on a grocer’s shelf.

Lower energy costs equal greater spending by consumers, in turn lifting corporate profits and lifting the SPY. Natural gas will also allow Ford and General Motors to produce lower emissions and cost to operate vehicles. Expect consumers, the overall market, automakers and natural gas producers to win and high-cost oil producers to struggle.

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Members of the Organization of the Petroleum Exporting Countries will hold their first meeting of the year on Thursday and, following steep declines in oil prices and ahead of European Union sanctions on Iran, they should have plenty to talk about.

“A month ago, it seemed like the quota meeting would be pretty boring, but maybe not now,” said Michael Lynch, president of Strategic Energy & Economic Research and a scheduled speaker at the upcoming OPEC conference.

“The recent drop in prices is causing some pain in countries, like Venezuela and Iran, and they will push for an earlier reduction in production quotas than the Saudis are likely to agree to,” he said.

The cartel’s members are gathering in Vienna for their official meeting on June 14. The election of a new secretary general to replace Abdalla el-Badri of Libya, which could provide a roadmap to the cartel’s next steps, will be closely watched. But more immediate concerns may get the most play.

“The main topic for discussion is no doubt the 15% decline in Brent crude prices in May that brought the benchmark below $100 for the first time in 240 days,” said Kirk McDonald, senior research analyst at St. Louis-based Argent Capital Management.

Brent crude on ICE Futures in London UK:LCON2 -2.06% closed below $100 a barrel on June 1 for the first time since early October. It finished at $99.93 Thursday, while OPEC’s basket price, a weighted average of oil prices from various oil-producing nations, was at $96.19 on June 5.

Futures prices for West Texas Intermediate crude CLN2 -2.97% traded on the New York Mercantile Exchange have also fallen 14% since the start of the year. They’ve lost 18% quarter to date to $84.82 a barrel Thursday.

When members of OPEC met on Dec. 14, the oil market appeared to have found a sense of balance, with Brent crude trading relatively stable above the $100-a-barrel level during the second half of 2011, despite OPEC’s failure to come to a production agreement at the meeting in June of that year. Read about the situation ahead of December summit.

In December, members decided to “maintain” the cartel’s total production level of 30 million barrels per day, though it wasn’t clear whether the group was actually maintaining output or legitimizing over-production. Read a Dec. 14 blog on OPEC.

OPEC output has been outpacing the target ceiling, partly because producers are anticipating a sizable decline in Iran oil exports once EU sanctions officially take hold on July 1.

A Platts survey of OPEC and oil industry officials and analysts showed that OPEC members’ output in April was 31.7 million barrels per day, up 320,000 barrels from a month earlier, with Saudi Arabia’s up 50,000 barrels from March to nearly 10 million barrels per day.

The Saudis increased output during the first half of 2012 in part to help replenish global inventories in advance of the pending EU embargo of Iranian crude, said Eric Gordon, equity research analyst at investment management firm Brown Advisory in Baltimore.

While the consortium is currently producing nearly 2 million barrels per day above the collective 30 million barrels per day target agreed to in December, “seasonal summer demand strength combined with uncertainty regarding Iranian crude exports in the very near future makes it difficult to predict a reduction in output among remaining OPEC producers,” he said.

Iran clouds view

Indeed, with so much uncertainty surrounding Iran, OPEC will have a cloudier picture of oil supply and demand and may decide to do nothing at all with its output level.

“With the EU sanctions against Iran due to come into effect in less than a month and a new round of nuclear talks set for Moscow on June 18 between Iran and world powers, we may see a return to the bullish geopolitical element that pushed [Brent] oil prices up to their highest level since 2008 earlier in the year,” said Dubai-based Kate Dourian, editor in chief, Middle East, at Platts.

CLN2 82.30, -2.52, -2.97%

Overall, “the potential disappearance of even more Iranian crude from markets will make it hard to assess what supply fundamentals will look like in the second half of the year since no one knows how much oil Iran will be able to sell beyond July 1,” she said.

So if OPEC members choose to take any sort of action at the meeting, all they can do is “to repeat the action they took in December, when they effectively formalized overproduction and set a ceiling of 30 million barrels per day for all 12 members … without establishing formal quotas,” she said.

A new round of U.S. financial sanctions on Iran will also come into effect on June 28.

Previous sanctions on Iran have made it difficult to do business with the country, according to the U.S. Energy Information Administration.

As a result, Iranian crude production will likely fall by about 500,000 barrels per day by the end of 2012 from the country’s output level of 3.55 million barrels per day at the end of 2011, reflecting “a lack of investment,” the EIA said in a recent monthly report.

If the investment issues worsen, “other OPEC members would simply dip into their spare oil capacity,” said Andrew Schrage, editor and founder of Money Crashers, a personal finance blog.

So “even with tumbling [oil] prices, few OPEC members have backed off production,” he said. “They actually improved production to offset concerns about Iran’s supply levels.”

Those concerns over Iran helped build what the oil market referred to as a “war premium,” as Iran ratcheted up threats to disrupt oil shipments through the Strait of Hormuz in the wake of the EU embargo, U.S. financial sanctions and ongoing dispute over Tehran’s nuclear program.

“While the market risk premium associated with Persian friction has arguably abated in recent weeks, the underlying supply risk remains,” said Michael Peterson, managing director of energy research at MLV & Co.

At the same time, “June marks the beginning of the summer driving season in the northern hemisphere as well as the start of peak demand for global oil,” he said. So “enacting supply constraints at this point along the seasonal demand curve could unintentionally drive prices well above OPEC’s comfort level.”

On the agenda

The global economy, an election and discussions over how to keep prices consistent will also be on OPEC’s meeting agenda.

OPEC ministers will discuss the global economic slowdown and its impact on crude demand, as well as vote for the cartel’s new Secretary General, Argent Capital’s McDonald said. “Currently, there is serious disagreement in OPEC about what constitutes a ‘balanced’ oil market and the Secretary General is the person who needs to get all of the members in line.”

El-Badri of Libya currently holds the position, but his term expires at the end of this year.

Iraq, Iran and Saudi Arabia, among others, have nominated candidates, according to news reports.

“Given the strained relations between Saudi Arabia and Iran, it is unlikely the Iranian candidate will win,” said James Williams, an energy economist at WTRG Economics.

And “the Saudis might object to the Iraqi candidate, Thamir Ghadhban. Ghadhban is a technocrat and would probably do well, but some could see him as a proxy for Iran because of Iran’s strong influence on the current [Iraqi] prime minister,” he said. “Ecuador’s Oil Minister Wilson Pastor could face the least opposition because he has not part in the ongoing Shiite/Sunni and Arab/Persian rivalries.”

Whoever wins the election may offer a hint on OPEC’s next move.

“The election of the Secretary General might provide insight [into] which viewpoint will dominate future meetings,” said Derek Gates, founder of index provider Sustainable Wealth Management in Calgary, Alberta, Canada.

“If the new Secretary General comes from Iran, then Iran would be able to set the agenda for the next OPEC meeting in December 2012,” he said. “Iran has indicated that they want to keep the production quota as is (in the hope of keeping prices high). This would support other struggling OPEC nations such as Venezuela.”

OPEC members, meanwhile, will also strive for consistency in oil prices at the conference next week.

“OPEC wants to see oil at $100 per barrel, which is a good number for all of them,” said Will McAndrew, chief executive officer of Xtreme Oil & Gas Inc. XTOG 0.00% . “If that doesn’t happen, things can get pretty contentious.”

Iran’s cost of production is “extremely high” at a little under $85 a barrel, he said, and while the global price of oil is above this level, Iran is “dangerously close to the brink.”

“If Saudi Arabia keeps increasing production and lowering the price of oil, Iran will boil and burn,” McAndrew said. Under that scenario, “you would see the Strait of Hormuz closed down and the price of oil jump up about $20 immediately, which would coincidentally bring the number to over $100.”

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(Reuters) – Iraq sees production from its southern oilfields reaching 2.75 million barrels per day (bpd) by the end of the year as the country, expected to be the world’s biggest source of new oil supplies over the next few years, pushes to increase output.

Iraq’s biggest field Rumaila, operated by BP, is currently producing 1.316 million bpd and is expected to boost output by 250,000 bpd in the second half of this year, Dhiya Jaffar, head of the state-run South Oil Co. said on Friday.

“We expect production from Basra oilfields will increase from 2.15 million barrels per day to 2.75 million barrels per day by the end of this year,” he told a news conference in the southern oil-rich city of Basra.

Iraq aims to double its output over the next three years as it recovers after years of sanctions and war. Last month, the country’s oil production rose above 3 million bpd for the first time in more than three decades.

Jaffar said output at West Qurna One, currently at 406,000 bpd, was seen increasing by 100,000 bpd in the next six months while Zubair oilfield, also in the south, was producing 254,000 bpd and expected to increase by 100,000 bpd by the end of 2012.

West Qurna One is run by Exxon Mobil and Italy’s ENI is in charge of Zubair field.

SECOND FLOATING PLATFORM

South Oil Company sources told Reuters on Thursday Iraq was ready to begin loading oil from the second new Single Point Mooring (SPM) floating platform in a bid to further boost exports.

Iraq’s oil exports rose to their highest level since 2003 in March thanks to the first new offshore export terminal, which began exporting at a capacity of 300,000 bpd last month.

A ship with a capacity of two million barrels had docked at the second SPM and loading oil onto it would be completed by around 12 p.m. (0900 GMT), Jaffar said.

“The export capacity of the 2nd floating platform is 900 thousand barrels, and the first floating platform is also 900, so the total will be 1.8 million barrels,” Jaffar said.

Iraq’s oil exports have been held back by a lack of loading capacity in the Gulf after decades of neglect of infrastructure due to war and economic sanctions, but it is expected to provide the world’s largest expansion in oil export capacity in 2012 as new outlets open.

Iraq has planned for four new SPM terminals which are being built by Australian construction firm Leighton and are expected to help it in doubling output in the next few years.

Original Article

Jan. 18 (Bloomberg) — OPEC’s December crude production rose to the highest level in more than three years and is set to climb further this month, the International Energy Agency said.

Daily supply from the Organization of Petroleum Exporting Countries’ 12 members rose by 240,000 barrels a day last month to 30.89 million barrels, on a “rapid recovery” in Libyan supplies and higher output from Saudi Arabia and the United Arab Emirates, the Paris-based agency said today in its monthly oil market report. That’s up from 30.64 million in November.

Production exceeded the group’s output ceiling of 30 million barrels a day, which was set at its Dec. 14 meeting in Vienna, the IEA said. The new limit includes supplies from Iraq for the first time in more than two decades. OPEC pumped 30.82 million in December, according to the group’s Jan. 16 report.

“OPEC supply is on course to rise further in January,” as U.S. sanctions and a proposed European Union oil embargo threaten purchases of Iranian oil, the IEA said. “As a result, customers have been aggressively seeking alternative supplies from other OPEC members, especially Saudi Arabia.”

The kingdom, the world’s largest crude exporter, boosted output last month by 100,000 barrels a day to 9.85 million barrels a day, the agency said.

“Production may be closer to the 10 million barrels a day mark in January, with an increase in shipments expected” to the west, the IEA said, citing tanker data.

Libya boosted shipments to 800,000 barrels a day in December from 555,000 barrels in November as more fields started operating after the country’s armed conflict last year.

In contrast, Iran’s average output dropped to 3.58 million barrels a day last year, the lowest since 2002, the IEA said.

OPEC, provider of about 40 percent of the world’s crude, set its biggest-ever supply cuts three years ago. Supply, from all members excluding Iraq, was cut by 4.2 million barrels a day to 24.845 million. The group largely exceeded its quotas last year as nations sought to take advantage of higher prices and to make up for the lack of Libyan crude.

OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

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Tokyo (Platts)–22Dec2011/549 am EST/1049 GMT

Global supply and demand of crude oil is expected to be balanced in 2012 if OPEC’s oil production stays at the current level of 30 million b/d, the Institute of Energy Economic Japan said Thursday.

World oil demand will grow by 1 million-1.1 million b/d to 90.1 million b/d, while total oil production is seen to rise 500,000-600,000 b/d to 90 million b/d with higher production from non-OPEC countries, such as the US and Russia, IEEJ said.

The average price of WTI crude for 2012 is expected to be $100/barrel, with a margin of plus or minus $10/b, it said.

Meanwhile, global LNG supply will be enough to meet Japan’s increasing demand. Japan has been importing more LNG and other fuels to meet power demand as utilities were facing difficulty restarting their shut nuclear plants after the March 11 earthquake, said IEEJ.

World LNG demand in 2012 will be about 242 million mt while supply will come in at 263 million mt, the institute said.

Japan will import 82 million-95 million mt of LNG in fiscal 2012-2013 (April-March), depending on operation rates of nuclear power plants, it said.

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Oil prices: Americans will spend more than $448 billion on gasoline this year. Rise in oil prices also means more than $1 trillion for OPEC.

By Ronald D. White,

American drivers this week broke a record that will bring them no joy.

They collectively spent more than $448 billion on gasoline since the beginning of the year, according to the Oil Price Information Service, putting the previous record for gas expenditures — set in 2008 — in the rearview mirror with weeks of driving still to go.

It’s also a huge jump over last year, when U.S. drivers spent more than $100 billion less on gas.

The major reason for the record-setting gas spending in 2011 was that oil prices were consistently high all year. And that probably brought joy at the other end of the pipeline. The Organization of Petroleum Exporting Countries is on pace to top $1 trillion in net oil exports for the first time, or 29 percent more than last year.

Next week, OPEC convenes to discuss production levels. Analysts held out little hope that the group, which pumps 40 percent of the world’s oil, would raise output to lower prices and boost the economic recovery in the U.S. and Europe.

“They won’t do anything,” said Fadel Gheit, senior oil analyst at Oppenheimer and Co. “They can lay the blame on the banking sectors and debt, and they are happy to keep providing oil at what are record prices for this time of the year.”

On Friday, crude oil for January delivery gained $1.07 to close at $99.41 a barrel on the New York Mercantile Exchange. NYMEX oil prices are up 8.8 percent so far for the year.

At the pump, gasoline prices hit a record for this time of year. On Friday, average price of a gallon of regular gasoline was $3.293, according to the AAA Fuel Gauge Report. That’s 28.5 cents a gallon higher than the record for a Dec. 9, set in 2007. It was 31.8 cents higher than last year.

Burbank, Calif., resident Dan Bell, 38, said he recently turned down a higher-paying job because he would have had to spend too much on gasoline to get there.

“I just hate the fact that OPEC is making that much money,” Bell said. “There’s not much we can do. We still have to go to work.”

According to the Energy Department, the demand for vehicle fuel has been about 4 percent lower this year than in 2010. And domestic production of oil is on the rise.

But increasing amounts of oil produced in the U.S. are going to other countries. For the past three weeks, U.S. refineries have had a record high level of fuel exports, averaging about 2,984,000 barrels a day to markets overseas, the Energy Department said.

That was more than 600,000 barrels a day higher than last year and more than twice as much as was exported in 2008.

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By Emma Farge and Dmitry Zhdannikov

LONDON | Wed Nov 9, 2011 9:13am EST

LONDON (Reuters) – Oil prices could hit economically damaging record highs if unrest in Africa and the Gulf cuts investment in output, the West’s energy watchdog warned oil producers, which said the real problem was likely defaults among euro zone members and banks.

The International Energy Agency (IEA), which advises major oil-consuming countries on energy policies, said on Wednesday oil prices could spike by a third to above their all-time high of $147 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) said the main risks were of price falls.

Relations between OPEC and the IEA hit lows earlier this year when OPEC failed to agree on an increase in oil output and the IEA released its stockpiles to compensate for the loss of Libyan oil and to help support flagging economic recovery.

OPEC has already signaled it sees no need to release any extra oil to the markets when it meets in December but will probably face increased pressure from consumers as the IEA insists that current prices are damaging the economy.

“In 2011, $102 is the average price through to today which means the global economic recovery is at risk. We are in the danger zone for the global economy at current levels,” IEA economist Fatih Birol told a news conference.

“There is a possibility that production growth from the (Middle East and North Africa, MENA) region may not be what the consumers would like to see. This would be a pity for the global economy, a pity for the oil sector and a pity for those governments.”

Birol’s comment followed the release of the IEA’s annual World Energy Outlook, which said that if investment in the MENA region runs one-third lower than the $100 billion per year required between 2011-2015, consumers could face a near-term rise in the oil price to $150 per barrel.

Benchmark Brent crude was down $1.54 cents at $113.56 a barrel by 1150 GMT on Wednesday, pressured by European debt worries, after reaching its highest close since September 15 on Tuesday.

EURO DEFAULTS AND EURO UNREST

OPEC, which produces every third barrel in the world and has faced unprecedented unrest across its members this year, said in its monthly report on Wednesday it was not overly concerned by underinvestment by its member countries in light of current oil prices and large increases in public spending.

“It is expected that economic growth in 2012 in the MENA region will be stronger than in 2011, mainly due to the massive infrastructure and industrial development in Saudi Arabia, and robust growth in Iraq,” it said.

“The economic expansion of the region might also be affected by the rebound of Libya and other North African economies affected by unrest in 2010,” it said, devoting much more space in the 75-page report to Europe’s debt crisis.

It said that while China’s growth was still strong and the United States was seeing a slight improvement in its economy, the situation in Europe was deeply worrying even though the continent was not a major factor in oil demand growth.

“Worries about its (Europe’s) sovereign debt situation and the possibility of defaults by some of its member states – which could bring down major European banks and push the euro-zone into unchartered territories – are the main concerns that have driven markets over the recent weeks.”

“In light of the most recent developments of an almost default by Greece, it is almost unavoidable to not provide a bigger answer to calm nervous markets, which have pushed up the risk-premium of Italian sovereign bonds to almost unbearable levels of around 7 percent,” OPEC said.

OPEC said European unemployment had been at very high levels for about two years and this was not only depressing consumption but also increasing social tensions in some euro-zone economies.

“European economic growth forecasts for 2011 and 2012 are now reduced, which undoubtedly will affect the global economy through euro zone trade and financial relationships with other parts of the world,” OPEC said.

(Reporting by Emma Farge, Alex Lawler, Dmitry Zhdannikov, Oleg Vukmanovic, Christopher Johnson; Writing by Dmitry Zhdannikov; Editing by Anthony Barker)

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By SAURABH CHATURVEDI And ERIC YEP

NEW DELHI — The Organization of the Petroleum Exporting Countries is unlikely to make any major decisions to change its oil production levels at its next meeting in December, Qatar’s minister of energy and industry said Friday.

“Today the supply as well as stock is in a healthy situation. We don’t expect surprises in December,” Mohammed Bin Saleh Al Sada told reporters after a meeting with Indian Oil Minister Jaipal Reddy.

Mr. Al Sada said it is premature to say whether there will be a major policy change by OPEC but there is “no element of surprise or element of concern at the moment.”

OPEC produces about 40% of the world’s oil. At its June meeting, most OPEC members led by Iran refused to boost production, citing economic uncertainties. But Saudi Arabia and other Gulf nations raised output unilaterally due to disruption in supply from Libya.

Libyan crude production has now restarted at a faster pace than was anticipated.

Mr. Al Sada said that despite Libyan crude supply resuming, Qatar has no plan to cut production. “Qatar is not cutting its oil output. We’re watching oil market developments and coordinating with OPEC.”

Separately, Mr. Reddy said India is seeking more oil and gas from Qatar to meet the South Asian nation’s rising fuel demand. “Discussions are going on. So far they’ve been very favorable on cost,” he said.

Qatar is the world’s largest exporter of liquefied natural gas, or LNG, and has the capacity to export 77 million tons a year. It is India’s largest LNG supplier.

“I confirm solid commitment towards India, to supply them with LNG through existing projects, which have been running smoothly and reliably,” Mr. Al Sada said, adding that talks for more supply were in progress.

Qatar is looking to invest in oil and gas projects of Indian state-run companies, and state-run Qatar Petroleum’s overseas arm Qatar Petroleum International is studying the purchase of Asian Development Bank’s minority stake in Petronet LNG Ltd., Mr. Al Sada said.

“We’re directly interacting with relevant parties, Petronet LNG basically,” he said, without elaborating.

Meanwhile, two senior executives at GAIL (India) Ltd. said the company is in advanced negotiations to import three million tons of LNG from Qatar.

Original Article