Qatar’s LNG industry crosses a new milestone
February 15 2014 11:38 PM

Qatar’s liquefied natural gas industry crossed another key milestone recently when it replaced Yemen as Thailand’s biggest supplier of LNG in 2013 as the Southeast Asian country’s imports of the fuel rose 45%.

Currently, Qatar is the largest exporter of liquefied natural gas (LNG) in the world with a capacity exceeding 77mn tonnes a year. It is also home to the world’s third biggest natural gas reserves.

The importance of the LNG segment in particular and the energy industry in general to Qatar is quite evident from the hydrocarbon sector’s contribution to national economy.

A recent report by QNB showed the hydrocarbon sector, which consists of crude oil and raw gas production, perked up and expanded to a better-than-expected 1.8% year-on-year in the third-quarter of  2013 owing to higher production of natural gas due to LNG facilities coming back to full operational capacity after some downtime for maintenance over the last year.

But over the next few years, Qatar may see increasing competition in the global LNG market with new production facilities coming online in Australia and North America.

While the global LNG supply will be scaled up in view of these new production facilities, whether that will be enough to meet the growing appetite for clean energy remains to be seen. The energy demand is on the rise in giant emerging economies such as China and India and Japan, which is the world’s third largest economy. The situation is the same in many emerging markets in the Middle East and South America. And this will be compounded by the expected growth in global consumption by recovering traditional economies.

Reports indicate that Asia is the driving force behind most of the growth in the global energy demand. And analysts believe this will continue for the foreseeable future. Thanks to robust economic growth and increasing populations, Asian economies are not just demanding more energy, but also cleaner and more flexible energy.

The fact, however, remains that the demand for imported energy is slowly dwindling in North America, the world’s largest energy market, due to increasing shale gas production. New fracking techniques have made US shale gas commercially viable. This has virtually eliminated the need for the US to import LNG.

The drop in US demand, however, has been replaced by strong demand from Asia, particularly from Japan after the Fukushima nuclear accident in March 2011. As a result, QNB researchers expect global LNG demand to remain strong over the next decade.

Reflecting these changes in the global energy market, Qatar has redirected its LNG exports over the last three years from the US to Asia. China has started importing LNG from Qatar in August 2013. Japan has switched from nuclear to gas-fueled power stations following the Fukushima disaster, which has more than made up for the loss of US LNG imports. In addition, other economies in Asia are increasing their imports of LNG gas from Qatar, including India, Malaysia and Thailand.

Demand from Asia is likely to continue to remain strong as its economies expand rapidly over the medium term. Qatar, therefore, is unlikely to lose its leading role in the global energy market for many years to come.




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