Qatar strengthens its grip on Asian LNG market in series of agreements

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State-owned Qatar Energy (QE) is actively pursuing long-term contracts to supply liquefied natural gas (LNG) to buyers across Asia as it continues its plan to significantly increase its production and maintain its leadership role in a growing global market. Marlet.

Over the past year, Qatar has signed at least 10 long-term sale and purchase agreements, committing to supply 17.8 million metric tons / year (mmty) of LNG for 10 to 20 years . Five contracts for 8.5 mmty were signed with China, while five other contracts for 9.3 mmty were signed with Bangladesh, Pakistan, Taiwan, Singapore and South Korea. The agreements appear to be part of a larger strategy.

“There has been a lot of speculation about the Qatari strategy… They have a lot of products coming in the next few years and want to make as many long-term sales as possible in an era of decarbonization where the Net-Zero Organization for Cooperation and economic development, countries may be unwilling or unable to engage, ”said Jonathan Stern, senior researcher at the Oxford Institute for Energy Studies.

“In addition, they want to get ahead of new US, and possibly Australian, Russian and East African projects, as high prices encourage investors to make final investment decisions (FIDs),” he said. Stern told NGI.

In addition, more than 10 of Qatar’s medium and long-term agreements to supply around 16.89 mmty of LNG are set to expire between 2021 and 2025, according to data from the International LNG Importers Group (GIIGNL).

The supply of legacy projects increases as existing contracts expire, according to Wood Mackenzie. The company said the new supply to Qatar’s North Field East (NFE) project and the Golden Pass joint venture in the United States, as well as the expiration of 20 million existing contracts, mostly in North Asia, means more 60% of its portfolio is not contracted by the end of the decade.

About two-thirds of Qatar’s LNG exports are delivered throughout Asia. The country has long been one of the world’s leading exporters. Australia overtook Qatar last year for the first time as the world’s largest exporter, shipping 77.8 mmty overseas, according to GIIGNL data. Qatar exported 77.1 mmty in 2020 and its LNG production costs are among the lowest in the world.

Qatar reached an FID on the NFE of nearly $ 30 billion earlier this year, the largest sanctioned LNG project in the world. The project would increase the country’s overall LNG production capacity to 110 mmty from 77 mmty. The four-train LNG project is expected to start production in 4Q2025 and reach full capacity in early 2027.

[LNG Drivers: Tune into NGI’s Hub & Flow podcast as LNG Insight Editor Jamison Cocklin and Poten & Partner’s Global Head of Business Intelligence Jason Freer discuss what to expect this winter from the LNG market. Listen Now.]

Qatar plans to allot 30% of the shares of each of the four trains to financial partners in the first quarter of 2022, QE CEO Saad Sherida al-Kaabi said in September at the Dubai Gastech Exhibition and Conference.


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