QatarEnergy eyes major LNG trading expansion

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ENB Pub Note: Below the line is the report from Bloomberg about QatarEnergy and money being left on the table. I added the Qatar LNG export capabilities on the top.

• As of 2024, Qatar’s LNG export capacity is 77 million metric tons per annum (mmtpa), equivalent to approximately 105–108 billion cubic meters (bcm) per year.
• This capacity is primarily from the North Field, the world’s largest non-associated natural gas field, shared with Iran (South Pars).
• Qatar is expanding its capacity through the North Field East (NFE) project, with the first phase expected to add 33 mmtpa by late 2025 or early 2026, increasing total capacity to 110 mmtpa (~150 bcm).
• By 2030, Qatar aims to reach 142 mmtpa (~193 bcm) with additional expansions (North Field South and North Field West).

• 2024:
  • Qatar exported approximately 79 million metric tons (Mt) or ~108 bcm of LNG, slightly above its nominal capacity due to high utilization rates (104% in 2022–2023).
  • Weekly exports in 2023 averaged 1.54 Mt, ranging from 1.19 to 1.82 Mt, with 2024 volumes expected to be similar.
• 2025:
  • Exports are projected to increase to 80–82 Mt (110–112 bcm) as the first NFE trains begin partial operation by late 2025.
  • Some sources claim Qatar could reach 110 Mt in 2025, reclaiming the title of the world’s largest LNG exporter from the U.S., though this is optimistic and depends on NFE’s timely startup.
  • Actual exports will depend on plant reliability, global demand, and pricing dynamics. Kpler estimates Qatar’s exports could hit 134 Mt by 2029 with full expansion, but 2025 will likely see a transitional increase.

• China:
  • Share: ~25% of Qatar’s LNG exports in Q1 2024, up from ~20% in 2023.
  • Volume: Estimated at ~19–20 Mt in 2024, projected to rise to 20–22 Mt in 2025 with new contracts.
  • Contracts:
    • In 2021, China Petroleum & Chemical Corp (Sinopec) signed a 10-year deal for 2 mmtpa starting in 2024.
    • In December 2021, QatarEnergy signed a 27-year deal with Guangdong Energy Group for 1 mmtpa (2024–2034, extendable).
    • In November 2022, a 27-year deal with Sinopec for 4 mmtpa was signed, with deliveries starting in 2025.
    • In 2025, Qatar will supply 3 mmtpa to China under a new deal, reinforcing China as the top importer.
  • Trend: China is Qatar’s largest trade partner, surpassing Japan, with long-term contracts extending to 2050. Qatar’s low-cost production (~$0.3/mmBtu vs. global $3–$5/mmBtu) makes it competitive in China’s market.
• India:
  • Share: ~17% of exports in Q1 2024, up from ~10% in 2022–2023.
  • Volume: 13.4 Mt in 2024, projected to increase to **14–15 Mt** in 2025 due to India’s rising demand and new infrastructure (e.g., Chhara terminal).
  • Contracts:
    • Petronet LNG, India’s top gas importer, has a long-term deal for 7.5 mmtpa through 2028, with negotiations ongoing for renewal at lower prices (mirroring deals with Bangladesh and China).
    • In February 2024, Qatar signed a $78 billion, 20-year extension with India for 7.5 mmtpa through 2048, ensuring stable supply.
  • Trend: India’s growing LNG import capacity (47.7 to 55 mmtpa by 2025) and push for natural gas (6.2% to 15% of energy mix by 2030) make it a key growth market. Qatar benefits from proximity (3-day shipping) and competitive pricing.
• Japan:
  • Share: ~10–15% of exports in 2024, down from ~20% in 2009.
  • Volume: 7.8–11.8 Mt in 2024, expected to remain stable or slightly decline to **7–10 Mt** in 2025.
  • Contracts: Japan, historically a top destination, relies on long-term contracts, but buyers are shifting to shorter-term deals with fewer destination clauses, favoring competitors like the U.S., UAE, and Oman.
  • Trend: Japan’s demand is flat due to energy efficiency and nuclear restarts. Qatar faces competition as Japanese buyers avoid long-term contracts and destination restrictions.
• South Korea:
  • Share: ~10% of exports in 2024, down from ~15% in 2009.
  • Volume: 7.8 Mt in 2024, projected to hold at **7–8 Mt** in 2025.
  • Contracts: In July 2021, Korean Gas Corporation (KOGAS) signed a 20-year deal for ~2 mmtpa starting in 2025 at 34% lower prices than previous contracts.
  • Trend: Like Japan, South Korea prefers flexible terms, reducing Qatar’s appeal compared to U.S. and UAE suppliers.
• Pakistan:
  • Share: ~11% in Q1 2024.
  • Volume: 8.6 Mt in 2024, expected to remain at **8–9 Mt** in 2025.
  • Contracts: Long-term deals with QatarEnergy supply ~3 mmtpa, with additional spot purchases.
  • Trend: Pakistan’s economic constraints limit growth, but Qatar’s discounted prices (via Cape of Good Hope routing) maintain its role.
• Bangladesh, Thailand, and Others:
  • Share: ~5–10% combined in 2024–2025.
  • Volume: 4–8 Mt in 2024, projected to grow to **5–10 Mt** in 2025 as Qatar targets emerging markets.
  • Contracts: Bangladesh has a long-term deal for ~1.8 mmtpa, with negotiations for lower prices. Thailand and other Southeast Asian nations are signing mid-term contracts.
  • Trend: Qatar sees these as growth markets, leveraging low-cost supply to compete with Australia and the U.S.

• Germany:
  • Volume: 0.5–1 Mt in 2024, expected to rise to **1–2 Mt** in 2025.
  • Contracts: In November 2022, QatarEnergy signed a 15-year deal with ConocoPhillips for 2 mmtpa starting in 2026, but some volumes may flow earlier via spot markets.
  • Trend: Germany’s LNG demand is growing post-Russia, but Qatar prioritizes Asia due to higher returns.
• France:
  • Volume: 0.5–1 Mt in 2024, projected to increase to **1–1.5 Mt** in 2025.
  • Contracts: A 27-year deal with TotalEnergies for ~1 mmtpa starts in 2025.
  • Trend: France’s demand is stable, but long-term contracts secure Qatar’s presence.
• Italy:
  • Volume: 0.5–1 Mt in 2024, expected to grow to **1–1.5 Mt** in 2025.
  • Contracts: A 27-year deal with Eni SpA for ~1 mmtpa begins in 2025.
  • Trend: Italy’s LNG imports are rising, but Europe’s flat demand limits growth.
• United Kingdom, Belgium, Spain:
  • Volume: 2–3 Mt combined in 2024, projected to remain at **2–3 Mt** in 2025.
  • Contracts: Long-term deals from the 2000s (e.g., with Shell Plc) supply ~1–2 mmtpa, supplemented by spot sales.
  • Trend: These markets are stable but not prioritized due to declining gas demand forecasts (480 bcm in 2022 to 300 bcm by 2050).

• Kuwait:
  • Share: ~5% in Q1 2024.
  • Volume: 3.9 Mt in 2024, expected to hold at **3–4 Mt** in 2025.
  • Contracts: Short-term and spot deals via the Dolphin pipeline and LNG shipments.
• UAE and Oman:
  • Volume: ~1–2 Mt combined in 2024–2025 via the Dolphin pipeline (3.2 bcfd capacity) and LNG.
• Emerging Markets (e.g., Egypt, Brazil):
  • Volume: <1 Mt in 2024, potentially ~1–2 Mt in 2025 as Qatar explores new buyers.

• Market Dynamics:
  • Asia Focus: Qatar prioritizes Asia (China, India, Pakistan) due to demand growth (52% of global gas demand increase by 2050) and proximity, reducing shipping costs.
  • Europe Decline: Exports to Europe dropped to 870,000 tons in May 2024 (from 1.23 Mt in January) due to longer routes and oversupply. Recovery is possible in 2025 (1.02 Mt tracked for June 2024), but Europe is secondary.
  • Competition: The U.S. (92.9 mmtpa capacity, 114.4 bcm exports in 2023) and Australia (107 bcm by 2028) challenge Qatar, especially in Asia, where flexible U.S. contracts (no destination clauses) attract Japan and South Korea.
• Contracts:
  • Qatar favors long-term contracts (15–27 years) for stability, but Asian buyers (Japan, South Korea, China) increasingly demand shorter terms and no destination restrictions, stalling some talks.
  • New deals with China, India, and Europe (Germany, France, Italy) through 2050 secure ~20 mmtpa of future exports.
• Pricing and Costs:
  • Qatar’s low production cost ($0.3/mmBtu) allows competitive pricing, undercutting global averages ($3–$5/mmBtu).
  • Lower global LNG prices in 2024–2025 (~$8–$12/mmBtu) boost demand in Asia, but oversupply risks by 2026 could pressure prices.
• Geopolitical Factors:
  • Qatar’s pivot to Asia intensified after Russia’s invasion of Ukraine (2022), as U.S. LNG filled Europe’s gap.
  • Qatar threatened to halt EU supplies in December 2024 over emissions penalties, signaling leverage in Europe.
  • U.S. LNG export pauses (January 2024) give Qatar a short-term edge, but U.S. capacity (218 bcm by 2030) may outpace Qatar long-term.

Al-Kaabi said on Tuesday during a session at the Qatar Economic Forum, powered by Bloomberg, that QatarEnergy started trading “just a few years back.”

“What we saw is that there was money left on the table, if you will. Traders from around the world were buying. But, you know, we have some spot cargoes sometimes, and they would buy our cargo and make money out of it. And we have the capability and can actually, you know, establish a trading organization. So we did,” he said.

Al-Kaabi said that QatarEnergy’s trading unit is currently trading “around ten million tons of LNG, physical trading.”

He said the “mandate is more than 50 percent needs to be non-Qatari volume, which is the case today.”

“The ambition is by 2030 to reach somewhere in the range of 30 to 40 million tons of non-Qatari LNG traded by our trading group,” he said.

He also discussed whether QatarEnergy will reserve a portion of the output from the North Field expansion for spot trading.

“I think, you know, we’re going to be producing 160 million tonnes of LNG via projects that we are participating in, if you include the US,” he said.

“We’re at 77 million tons today. We have 70 ships, today we’re adding 128,” Al-Kaabi said.

“So all that will have will be really under the control of our trading organization where they control the trade spot, trade some of that volume. Not all of the volume will be locked up in long-term deals, but we will have plenty to deal with,” Al-Kaabi added.

QatarEnergy is working on the giant North Field LNG expansion program, which includes the North Field South and North Field West projects. Together, these will raise Qatar’s LNG production capacity from the current 77 mtpa to 142 mtpa in 2030.​

The first two projects include six mega trains, each with a production capacity of 8 mtpa of LNG. Four of these are part of the North Field East expansion project, and two are part of the North Field South expansion project.

In February 2024, QatarEnergy also announced the North Field West project, which will add 16 mtpa of LNG to the overall expansion of the North Field.

The post QatarEnergy eyes major LNG trading expansion appeared first on Energy News Beat.

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