[[{“value”:”
Shorter-term and more flexible LNG contracts offered by sellers from the United States, the United Arab Emirates (UAE), and Oman are challenging Qatar’s dominance in liquefied natural gas supply to north Asia, trade sources have told Reuters.
Qatar, one of the world’s top three LNG exporters together with the United States and Australia, is now finding it harder to compete with sellers offering flexible cargo destinations and term contracts with shorter durations, according to Reuters’s sources.
Moreover, Qatar’s LNG supply is indexed to the price of oil, while U.S., UAE, and Omani cargoes are linked to the U.S. benchmark, Henry Hub, which typically results in cheaper supply contracts. Most non-Qatari cargoes are not restricted by a firm destination clause either, allowing buyers to resell them.
Buyers in South Korea and Japan, for example, now prefer the flexibility and the shorter-term deals to procure LNG, the sources added.
Yet, Qatar continues to insist on destination clauses in its deals, which has resulted in a stalemate in negotiations with potential buyers in South Korea and Japan, they said.
Buyers seek diversification of supply and the UAE’s ADNOC, for example, has already moved to take advantage of the situation, a trade source told Reuters.
Qatar has a huge expansion program underway to boost its export capacity by a whopping 85% from current levels by 2030.
QatarEnergy is proceeding with 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 tiny Gulf nation has recently signed huge 27-year agreements for LNG supply to various countries in Europe and Asia, including Italy, France, the Netherlands, and China.
Last year, QatarEnergy President and CEO Saad Sherida Al-Kaabi said that “40% of all the new LNG that will come to the market by 2029, when all our projects are up and running, is going to be from QatarEnergy.”
By Tsvetana Paraskova for Oilprice.com
Is Oil and Gas An Investment for You?
The post Qatar Faces Rising Competition in Asia From Flexible LNG Suppliers appeared first on Energy News Beat.
“}]]