Asia Is Pivotal In Qatar's Long-Term LNG Export Strategy

Doha, Qatar: Asia will remain critical to Qatar's long-term LNG export strategy while seeking to boost exports to Europe, stated Fitch Solutions in a recent report.

Based on the review of recent LNG agreements inked by QatarEnergy (QE), the country's total LNG volumes committed to sell to Asian buyers are much higher as compared to European buyers.

The organisation signed two major deals including ConocoPhillips to sell 2.0mtpa of LNG from North Field East (NFE) and North Field South intended to be shipped to Germany.

Additionally, it also signed two key contracts with Sinopec and China National Petroleum Corporation (CNPC) to deliver 8.0mtpa of LNG for 27 years beginning in 2026.

The firm also signed a new contract with Bangladesh's Petrobangla to sell up to 1.8mtpa of LNG for 15 years starting from 2026.

These three contracts with Asian importers, however, alone add up to 9.5mtpa of LNG from the NFE project, which is designed to produce 32mtpa of
LNG.

The report said:“Though QE is seeking to strike LNG supply deals with European companies, we expect QE to sign more deals with Asian buyers going forward.”

It is learned that the country is in talks with Asian buyers for long-term supplies potential off-takers like Thailand's state-owned PTT, Japan's Jera, Tokyo Gas, Mitsui, and Marubeni, and buyers in South Korea and India, Fitch outlines.

Thailand's PTT which now imports 2.0mtpa of LNG from QE under a 20-year agreement is reportedly holding talks to sign a new long-term contract, the report mentioned.

“India's GAIL is reportedly negotiating to secure a deal with QE to buy at least 1.0mtpa of LNG for more than 20 years. India's LNG importer Petronet LNG is in advanced talks with Qatar to renew a 7.5mtpa LNG import contract expiring in April 2028,” Fitch highlighted.

“Other emerging markets including Vietnam and the Philippines are seeking to import LNG under long-term contracts though it remains uncertain they will seek to import from Qatar,” the report said.

The report further adds that“Anticipated decline in LNG production in Brunei combined with increased diversion of LNG for domestic consumption in Indonesia and Malaysia could further boost appetite of LNG imports outside of the region.”

Fitch remarked that“LNG pricing would be key to a potential increase in LNG imports from emerging countries, which have a strong appetite for long-term supply but are sensitive to prices.”

The country also currently considers Mainland China as a key strategic partner as it allows Chinese firms to invest in the NFE LNG project.

However, the report says that at present Qatar encounters increased competition from the US as the latter seeks to expand the LNG market in both East and West of Suez.

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