Natural Gas World Publishes Akin Gump Article on EC Investigation of Qatar LNG Contracts

Natural Gas World, in its Global Gas Perspectives, has published the article “European Commission Takes Aim at Qatar’s LNG Contracts,” written by Akin Gump international trade partner Davina Garrod and associate Sebastian Casselbrant-Multala; and energy partners Paul Greening and Michael Joyce and associate Kitty Ng. The article discusses the European Commission (EC)’s current investigation into Qatar Petroleum and the impact the investigation is likely to have on LNG supply agreements with European Economic Area (EEA) importers.

The authors write that the EC is investigating whether supply agreements “between Qatar Petroleum companies exporting LNG and European importers have hindered the free flow of gas within the EEA through so-called ‘destination clauses.’” These clauses, they say, could potentially restrict the list of countries to which the LNG can be sold. One focus of the investigation, “will be whether the complexities of the LNG market…justify the use of destination clauses.”

The article proceeds to outline how the investigation falls within several broader priorities of the EU. Based on other previous investigations discussed, the authors predict that “Qatar Petroleum could settle the investigation, allowing it to escape a fine of up to 10 percent of its worldwide turnover,” though the company could face “a commitment decision requiring it to remove all destination clauses from current contracts with EEA importers and preventing it from imposing any new destination clauses in the future.”

To read the full article, which originated as a post on AG Speaking Energy, please click here.