Japan's JERA Co, the world's biggest buyer of liquefied natural gas, said on Monday it has been informed by Qatargas that there will be no impact on LNG supplies after several Middle East countries cut ties with Qatar.
There would be "no conceivable impact on LNG supplies" from the rift, JERA said in a statement, adding "this is also a geopolitical issue in the Middle East and there is a possibility that this could be closely related to the energy market, so we will continue to keep watch on the movements."
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Qatar is the world's biggest exporter of liquefied natural gas, while Japan is the largest importer, taking in about one-third of global shipments.
Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar on Monday, accusing it of supporting terrorism. The worst rift in years among some of the most powerful states in the Arab world, came days after a news story, which Qatar claimed was fake, showed Qatar’s ruler Sheikh Tamim Bin-Hamad objecting to the hostile attitude adopted by Gulf States and the U.S. against Iran.
In April 2017, Qatar lifted a self-imposed ban on developing the world's biggest natural gas field, which it is shares ownership with Iran, in an attempt to stave off an expected rise in competition.
At the time the LNG market was undergoing huge changes as the biggest ever flood of new supply hit the market, with volumes coming mainly from the United States and Australia.
Russian President Vladimir Putin also was aiming to become the world's largest LNG producer.
Qatar had declared a moratorium in 2005 on the development of the North Field to give Doha time to study the impact on the reservoir from a rapid rise in output.
The flurry of liquified natural gas production has resulted in global installed LNG capacity of over 300 million tons a year, while only around 268 million tons of LNG were traded in 2016, Thomson Reuters data shows.
As part of the diplomatic rift, Saudi Arabia, the United Arab Emirates, Egypt and Bahrain also closed transport links with Qatar.
Iran's top priority
Iran, which suffers severe domestic gas shortages, has made a rapid increase in production from South Pars a top priority and signed a preliminary deal with France's Total in November 2016 to develop its South Pars II project.
Iran's oil minister also vowed this March to ramp up production of its part of the shared field.
"Iran's gas production in South Pars can exceed Qatar's before the end of new Iranian year [ending March 20, 2018]," Zanganeh was quoted as saying by Tasnim news agency.
Total was the first Western energy company to sign a major deal with Tehran since the lifting of international sanctions.
Qatar Petroleum's Chief Executive Saad al-Kaabi said the decision to lift the moratorium was not prompted by Iran's plan to develop its part of the shared field.
"What we are doing today is something completely new and we will in future of course ... share information on this with them [Iran]."
The economy of Qatar, a future World Cup host with a population of 2.6 million, has been pressured by the global oil slump and in 2015 QP dismissed thousands of workers and has earmarked a number of assets for divestment.
QP is merging two LNG divisions, Qatargas and RasGas, to save hundreds of millions of dollars.