Qatar’s LNG export strategy has been chartering a “successful course” through the challenges posed by 2020 and the country strengthened its position in the global LNG market, according to Gas Exporting Countries Forum secretary general Yury Sentyurin.
In spite of the current market challenges, Sentyurin pointed out that Qatar “has maintained its position as the world’s largest LNG exporter and even managed to increase its LNG exports in 2020, a remarkable achievement, which reflects its strength and adaptability in managing its resources and providing a reliable LNG supply to its buyers.”
Qatar continues to take advantage of its unique economic model in which it benefits from very low production costs, huge financial reserves, and a strategic location for its main consuming markets, Asia and Europe, Sentyurin said in an interview with Gulf Times.
He noted Qatar’s LNG exports, like any other GECF member country, have not been heavily impacted by the low gas and LNG spot prices as most of its long-term contracts are oil-indexed.
Further, Qatar has a “negligible exposure” to the spot market in its LNG portfolio.
“It is worth mentioning that in these challenging times of eroded demand and unprecedented low prices, the GECF member countries have demonstrated a great flexibility in diversifying their destination portfolios and pricing mechanisms, whilst preserving the sanctity of long-term oil-indexed contracts.”
For Qatar, Sentyurin said, this “flexibility is apparent in the recent deals” with Singapore’s Pavilion Energy and China’s Sinopec Corp, as well as the launch of the new trading arm, QP Trading, to diversify its LNG portfolio and manage price-risk through physical and derivatives trading.
Furthermore, Qatar continues to push the envelope with major investments across all segments of the gas value-chain.
On the liquefaction side, Qatar plans to increase its capacity from 77mn tonnes per year (mtpy) to 110 mtpy by 2025, and up to 126 mtpy by 2027.
In terms of regasification capacity, Qatar has booked 7.2 mtpy of regasification capacity at the UK’s Isle of Grain terminal for 25 years from mid-2025 to 2050.
With regard to shipping, Qatar has inked agreements with three major South Korean shipbuilders, Hyundai Heavy Industries (HHI), Daewoo Shipbuilding and Marine Engineering (DSME), and Samsung Heavy Industries (SHI), to reserve slots for the expansion of its LNG fleet. These agreements are valued at over $19bn.
As far as Qatar's strategy is concerned, GECF believes that Qatar, as one of its member countries, is supporting long-term contracts for its future agreements.
“As I mentioned previously, the recently signed 10-year LNG sales and purchase agreement between Qatar Petroleum and Singapore's Pavilion Energy for the supply 1.8mn tonnes of LNG annually from 2023 onwards, and Qatargas and China’s Sinopec Corp’s 10-year contract for 1mn tonnes LNG starting from 2023 are clear examples that Qatar is hedging its bets on long-term contracts.
“Having noted this and as already mentioned, Qatar is also active in the spot market and the country could adapt well to the current situation of the market. Qatar succeeded in raising its LNG exports for the first nine months of the year, which is a good achievement considering the current difficult market situation,” Sentyurin said.Last updated: January 23 2021 08:28 PM
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