Advertisements

Qatar Confronts Growing Competition in Asia From Flexible LNG Suppliers

by Krystal

Competition from more flexible liquefied natural gas (LNG) contracts offered by the United States, the United Arab Emirates (UAE), and Oman is posing a challenge to Qatar’s long-standing dominance in the LNG market in north Asia, industry sources told Reuters.

Qatar, one of the world’s top three LNG exporters alongside the U.S. and Australia, is facing difficulties as rival sellers offer shorter-term contracts and more flexible cargo destinations, sources explained.

Advertisements

Unlike Qatar, whose LNG supply is linked to oil prices, U.S., UAE, and Omani contracts are tied to the U.S. benchmark Henry Hub, which typically results in lower prices. Additionally, non-Qatari LNG cargoes are often not bound by strict destination clauses, allowing buyers to resell them freely.

Advertisements

Buyers in countries like South Korea and Japan are increasingly drawn to these flexible, short-term deals, according to sources.

Advertisements

However, Qatar’s insistence on including destination clauses in its agreements has caused a deadlock in negotiations with buyers in South Korea and Japan, they said.

Advertisements

With buyers seeking to diversify their LNG sources, the UAE’s state-owned ADNOC has seized the opportunity to fill the gap, a trade source noted.

Qatar is working on a major expansion plan to increase its LNG export capacity by 85% by 2030. QatarEnergy’s North Field West project, part of this effort, aims to develop the world’s largest natural gas field, which Qatar shares with Iran. The project follows the discovery of significant additional gas reserves.

In recent months, Qatar has secured several long-term LNG supply deals, including 27-year agreements with countries in Europe and Asia such as Italy, France, the Netherlands, and China.

Last year, QatarEnergy CEO Saad Sherida Al-Kaabi announced that by 2029, “40% of all new LNG entering the market will be from QatarEnergy.”

Related Topics:

Advertisements
Advertisements

You may also like

oftrb logo

Oftrb.com is a comprehensive energy portal, the main columns include crude oil prices, energy categories, EIA, OPEC, crude oil news, basic knowledge of crude oil, etc.

【Contact us: [email protected]

© 2023 Copyright oftrb.com – Crude Oil Market Quotes, Price Chart live & News [[email protected]]