Qatar’s energy minister has warned gas importers they face winter spikes in energy prices unless they sign up to long-term contracts as the slowdown in the US shale industry and the financial challenges faced by international oil companies put a freeze on global projects.

Saad al-Kaabi, who is also chief executive of state-owned energy company Qatar Petroleum, told the Financial Times that at “least half” of proposed global liquefied natural gas projects scheduled to start in the coming years “will not happen”.

Speaking after QP announced its final investment decision on the $28.75bn expansion of its North Field, al-Kaabi pointed to the constraints faced by energy groups battered by the slump in oil prices last year and the pressure on companies to invest more in renewable energy and less in fossil fuels.

“There isn’t a lot of money that will be helping oil and gas companies,” he said in an interview. “But the pure economics of these projects do not fly any more at low oil prices.”

He said that QP, which is expanding its production capacity from 77m tonnes of LNG per annum to 110m by 2025, could survive at $30 a barrel of oil compared to a sustained price above $60 a barrel required by rivals.

Long-term LNG contracts are generally linked to the price of crude, which fell to record lows last year as the pandemic throttled demand. Oil has rebounded to trade near $60 a barrel.

“If buyers don’t secure long-term deals . . . they will see spikes every winter and they will pay a hefty price,” said al-Kaabi, who oversees the development of the North Field, the world’s largest natural gasfield. “I might be wrong and everybody does their LNG projects and there’s too much supply. But at least for the next two years, you read the plans of the majors and everybody has pulled back from a lot of projects.”

The situation in the US is key to Qatar’s standing as the leading supplier in the LNG industry.

The International Energy Agency last year forecast that the US could overtake Qatar to become the largest exporter of LNG by 2025 given the rush to develop new LNG export projects, but some of those have been thrown into doubt.

Qatar was responsible for more than 20 per cent of LNG exports in 2019, narrowly ahead of Australia, while the US provided about 10 per cent.

In January, a cold snap in Asia boosted demand for LNG in Japan, China and South Korea, sending prices spiralling to record levels as traders struggled to secure enough cargoes to meet the surge in consumption.

LNG buyers had benefited in recent years from a move towards greater flexibility in contract pricing, as well as being able to source more individual cargoes from an oversupplied spot market.

But when the bad weather hit Asia, supplies dried up, boosting the argument of exporters like Qatar that have favoured long-term pricing.

“People thought this is a cheap commodity and you can have it whenever you want and nobody wanted long-term contracts,” al-Kaabi said. “[But] one or two shutdowns in Qatar or Australia and you’re dead. It’s not like oil [where] you have people who can put the tap on and off. LNG is not like that. It’s not an easy business and that’s what people will realise with time.”

Al-Kaabi said he expected customers to return to long-term contracts after being burnt in January, when some cargoes traded near $40 per million British thermal units (mmbtu) compared to as little as $2 per mmbtu last summer. Oil-linked long-term contracts would have priced around $8-$9 per mmbtu in January.

“The buyer who bought the $40 gas basically bought a year’s worth of his gas in one cargo,” al-Kaabi said. “I have about 5m to 10m tonnes of long-term deals that are around the corner [predominantly with Asian customers].”

The minister said a price linked to crude “somewhere in the range of between $60-$70 a barrel is a reasonable price for the long term”.

The expansion of capacity in Qatar comes at a challenging time for the industry.

Gas has long been pitched by producers as a bridge fuel given that it is one of the cleaner fossil fuels. But the rapid rise in interest in renewable energy, accompanied by sharp drops in the cost of wind and solar projects, have led some investors to question gas’s long-term future.

However al-Kaabi said that developing countries would still need large amounts of gas because of its affordability and to meet the needs of their fast-growing economies.

“You can’t do renewable on everything. People like electric cars, fine, but you need electricity . . . Renewables are going to pick up in a big way but it’s going to be coupled with huge development of gas markets.”

Al-Kaabi announced on Monday that Japanese company Chiyoda and Technip, a French group, had been awarded contracts as part of a $12bn-$13bn joint venture to build onshore infrastructure to increase capacity to 110m tonnes.

As part of the expansion, a bidding round to take a stake of up to 30 per cent in the first phase of the project starts next week. Energy majors such as Royal Dutch Shell, Total, ExxonMobil and ConocoPhillips have been keen to invest in a country with which they already enjoy close ties.

The IEA sees global gas demand rising by 30 per cent by 2040, but it is expected to peak before that time in developed countries, with growth coming primarily from Asia and the Middle East.

Al-Kaabi said QP would continue on its expansion path, with plans to increase production capacity from 110m tonnes to 126m tonnes by 2027.

“I will keep going with more expansions [after 2027] if technically it’s the right thing to do for the field . . . and I leave others to worry about me being in the market, not the other way around,” he said. “We think with any market condition nobody can beat us.”