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No ban on Qatari vessels in Suez: Canal authority

06 Jun 2017 15:06 (+01:00 GMT)
No ban on Qatari vessels in Suez: Canal authority

London, 6 June (Argus) — Passage of Qatari ships through Egypt's Suez Canal zone will not be affected by the severing of diplomatic ties between Doha and Cairo as well as Gulf Co-operation Council members Saudi Arabia, Bahrain and the UAE, the Suez Canal Authority (SCA) said.

The Constantinople Convention, the treaty governing transit through the Suez Canal, will be upheld despite the diplomatic row, the SCA said. The convention guarantees passage of all ships through the canal, with exemptions applied when Egypt is in a state of war.

Qatari producers mainly use the Suez canal to deliver LNG to Europe. But it is still unclear how the diplomatic break may affect Qatari tonnage at Egyptian ports or Qatari LNG flowing into Egypt. No change in the procedure for Egyptian port calling was reported as of yesterday. Two floating storage and regasification units (FSRUs) are installed at Ain Sukhna port, south of the Suez canal.

Over 60pc of Egypt's LNG has been supplied from Qatar since Egypt began importing in 2015. Egyptian state-controlled gas firm Egas does not buy directly from Qatar, but through trading houses which have won recent supply tenders and have secured Qatari LNG for their Egyptian commitments.

Meanwhile, Saudi Arabia, Bahrain and the UAE have restricted access to their ports, banning ships arriving from or going to Qatar. Vessels carrying Qatari flags are also prohibited from docking at UAE and Saudi ports.

Egypt, Saudi Arabia, the UAE and Bahrain severed diplomatic ties with Qatar yesterday, citing Qatari support for extremist and terrorist groups as the principal reason for the break. Qatar denies the allegations, while the GCC members' discontent at Doha's relationship with Tehran could be a significant motive behind the split.

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