Qatar could squeeze out rival LNG supply, including from the current top exporter, the United States, and could end up controlling 25% of the global LNG supply by 2030 after it announced a new major expansion project days ago, analysts told Reuters.
On Sunday, QatarEnergy, the state company of one of the world’s biggest LNG exporters, said it was adding another major LNG expansion project to its two ongoing projects, aiming to raise its total LNG export capacity by 85% from current levels by 2030.
QatarEnergy is proceeding with a new LNG expansion project, the North Field West project, after drilling appraisal wells at the world’s largest natural gas field, the North Field it shares with Iran, and finding “huge additional gas quantities” in the field.
The North Field West project adds to the ongoing North Field East (NFE) and North Field South (NFS) expansion projects, with the three field developments expected to boost Qatar’s LNG production capacity to 142 million tons per annum (MTPA) before the end of this decade, representing an increase of nearly 85% from current production levels of 77 MTPA.
With the higher volumes and low-cost supply from Qatar, the Gulf producer could eke out market share from the other two major LNG exporters, the United States and Australia, analysts say.
“The Qataris realised that they should be able to offer pretty much the most competitive prices. They have the reserves, lower costs for building incremental capacity, the relationship with engineering firms and existing clients, so why stop here?” Ira Joseph, Senior Research Associate at Columbia University’s Center on Global Energy Policy, told Reuters.
The U.S. is now the world’s largest LNG exporter and is set to see export capacity grow in the next four years.
However, uncertainty weighs on the outlook for U.S. supply from the late 2020s onwards with the current pause on new LNG permit approvals announced by the Biden Administration last month.
By Tsvetana Paraskova for Oilprice.com
