KEY POINTS
- QatarEnergy is seeking 2-3 million tonnes of US LNG annually through 2031.
- Iranian strikes damaged facilities expected to remain offline for three to five years.
- About 80% of Qatar’s LNG exports normally go to Asian customers.
QatarEnergy is in talks with several US LNG producers to secure multi-year supplies through 2031 as it looks to replace export capacity damaged by Iranian attacks, according to people familiar with the discussions.
The talks involve major producers including Venture Global, Cheniere Energy and Woodside Energy, with QatarEnergy seeking between 2 million and 3 million metric tonnes per year of LNG, one source said.
The move signals a major shift in QatarEnergy’s strategy. The company has relied heavily on spot purchases in recent months to meet commitments to Asian customers, but is now looking for longer-term supplies as uncertainty grows over when its own production can fully recover.
Two of QatarEnergy’s 14 LNG production trains at the Ras Laffan industrial complex were damaged during Iranian strikes in March, along with a gas-to-liquids facility.
QatarEnergy CEO Saad al-Kaabi said at the time that the damage would remove about 12.8 million tonnes per year of LNG production capacity for between three and five years.
Production at the affected facilities was halted after the attacks, forcing QatarEnergy to seek alternative supplies to maintain deliveries to customers.
The company has also continued to issue force majeure notices to some customers. Its latest extension runs through November, although further extensions could be made if disruptions continue.
US producers have LNG available
The search for longer-term supplies could give US LNG producers an opportunity to secure additional contracts in the global market.
Data compiled by energy research firm Rapidan Energy shows that US LNG projects currently under construction have about 25 million tonnes per year of capacity available for purchase.
Venture Global has the largest amount of uncontracted capacity, estimated at about 10 million tonnes per year.
Cheniere and Woodside each have about 6 million tonnes per year available, while Sempra’s Port Arthur LNG project has around 3 million tonnes per year available.
QatarEnergy’s discussions with these companies could therefore provide the producer with a sizeable alternative source of LNG while repairs at Ras Laffan continue.
The negotiations also come as uncertainty persists around the Strait of Hormuz, a critical route for global energy shipments.
Qatar relies heavily on the waterway to move LNG to international customers, particularly in Asia. About 80% of Qatar’s LNG exports typically go to Asian buyers.
The continued disruption has prompted some Asian customers to look for alternative supplies, increasing pressure on QatarEnergy to demonstrate that it can maintain its contractual commitments despite the damage to its production facilities.
Energy analyst Saul Kavonic said QatarEnergy’s pursuit of long-term volumes from other producers suggests the company now sees a significant risk to its ability to export normal volumes for several years.
He said the strategy could indicate that the disruption around the Strait of Hormuz may last longer than initially expected and that the damage to Qatar’s LNG infrastructure could take longer to repair.
