Qatar has a huge expansion program underway to boost its export capacity by a whopping 85% from current levels by 2030.
The state giant 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, which is the world’s second-largest LNG exporter, has recently signed huge 27-year agreements for LNG supply to various countries in Europe and Asia, including Italy, France, the Netherlands, and China.
However, Qatar typically sells its LNG under long-term supply contracts at a price indexed to Brent Crude prices, and insists on specific ports of delivery for the cargoes.
But China and India, two of the biggest buyers of LNG in Asia and the world, are looking for cheaper long-term deals and agreements allowing flexibility in destination.
This is complicating the negotiations, according to Bloomberg’s sources.
Pakistan, another Qatari customer in Asia, plans to renegotiate its long-term LNG supply deal as it looks to lower its costs for the growing energy demand going forward, Pakistani Petroleum Minister Musadik Malik said earlier this month.
“The Qatar agreement is costly, and we will negotiate better terms next year,” Pakistani newspaper The News quoted Malik as telling a parliamentary committee on energy in early February.
Overall, shorter-term and more flexible LNG contracts offered by sellers from the United States, the United Arab Emirates (UAE), and Oman have been challenging Qatar’s dominance in liquefied natural gas supply to north Asia, according to traders.
(Oilprice.com, Feb 24, 2025)