Qatar set to retain its LNG crown despite economic blockade

Qatar set to retain its LNG crown despite economic blockade. Qatar has overtaken Australia’s efforts to surpass it as the world’s biggest producer of liquefied natural gas.
While the Gulf country may slip to second place behind Australia as top supplier of the fuel, it’s poised to retain the number one spot within the next seven years after Qatar Petroleum said it will raise output by 30%. Such an increase would surpass Australia’s planned expansion and reinforce Qatar’s role as a major global supplier – even amid an economic blockade by a Saudi-led coalition of countries.


Qatar seeks to produce 100mn tonnes of LNG, or about 40% of last year’s global supply, up from its current level of 77mn tonnes, QP president and chief executive Saad Sherida al-Kaabi, told reporters on Tuesday in Doha. Australia, which has spent $200bn to build LNG-exporting plants, may surpass Qatar as the biggest shipper as early as next year, but lose its leadership by the middle of the next decade given Qatar’s latest plans, according to data from Bloomberg New Energy Finance.

The US, the world’s biggest gas producer thanks to its shale boom, will likely remain the third-biggest supplier of LNG and may secure the lead if it adds plants beyond those already approved for construction, according to BNEF’s outlook. Australia may expand output to 94.3mn tonnes by 2030 if it adds new projects, according to BNEF. However, domestic shortages of the fuel may limit exports from the Pacific nation.
QP is doubling to 4bn cubic feet a day its target for output capacity at a new project in the North Field, al-Kaabi said. Demand for liquefied gas is growing faster than that for oil, he said.
“LNG supplies are abundant now, and there are many projects under development, but the expected growth in demand is very large,” al-Kaabi said. “All the studies show that between 2021 and 2024 there will be a shortage of gas because of higher demand. Therefore, the launch of our project will be between 2022 and 2024, which is the period when there will be market demand.”
Boosting gas output alone isn’t enough to escalate the regional crisis, said Emma Richards, a senior oil and gas analyst at BMI Research. “Qatar is not backing down,” she said from London. “By the same token, they haven’t done anything to try to provoke the others and try to make this worse than it already is.” Qatar won’t halt shipments of natural gas to the neighbouring UAE, al-Kaabi said, even though the UAE is among the nations trying to isolate Qatar.
The UAE imports gas from Qatar through a pipeline operated by Dolphin Energy Ltd, which is owned by Abu Dhabi’s Mubadala Development Co, Total and Occidental Petroleum Corp. The link supplies gas to the UAE and Oman and can send 3.2bn cubic feet a day, though it only uses about two-thirds of that capacity. QP is ending a 12-year ban on new projects at the North Field that allowed the company to assess how its current rate of extraction affects the giant reservoir. Qatar, also the biggest exporter of helium, is continuing to sell the gas, sending shipments by sea, al-Kaabi said.
QP has been examining options to increase capacity from its existing LNG plants, or trains as they are called. It hired Japan-based Chiyoda Corp in May to identify modifications that would de-bottleneck capacity at current facilities. Squeezing out more of the super-chilled fuel from existing plants is the cheapest way to boost production, but it won’t be enough, al-Kaabi said.
“With the volume we envisage producing now, we will have to build new trains,” he said.