Qatar Petroleum (QP) aims to build a trading desk to rival oil majors and trading houses and help smooth out spot gas price spikes, the chief executive of the world’s largest LNG producer told Reuters.

Saad al-Kaabi said in an interview that while state-owned QPwould still chiefly use long-term price contracts as it expands its production, spot volumes for trading would represent about5-10% of volumes sold.

Kaabi said boosting global trading volumes via the new desk will help stabilize the gas market, avoiding the price spikes and falls that he said could threaten its long-term future.

Last month, LNG prices soared to an all-time high due to a deficit in Asia and what Kaabi described as some traders and oil majors "punching above their weight" by trading gas they sometimes have not got.

Kaabi said traders should be supporting the market, and not fuelling spikes that could lead to doubts about the long-term viability and stability of LNG. "I am not happy when I see spikes in LNG," he said.

Asian LNG prices rocketed to record highs in January, outpacing gains in much of Europe and the United States where gas is abundant. That created an arbitrage opportunity for sellers.

Several companies and traders rushed to meet Asian demand but struggled to find volumes for quick delivery.

Kaabi said QP Trading "will be a very focal part of our business", with the desk giving buyers options to fulfill short-term needs that cannot be met via long-term contracts.

The group is working to "get the best traders from around the world" to support its growing trading business, he added.

NORTH FIELD

On Monday, QP signed a contract for the first phase of its North Field LNG project expansion, aiming to boost the country's output by 40% a year by 2026.

The expansion, which will take Qatar's LNG production capacity to 110 million tonnes per annum (mtpa) from 77 million TPA, is the largest single LNG project ever to be sanctioned.QP plans to boost its LNG capacity further to 126 mt by 2027.

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