This Middle Eastern country is already one of the world's largest exporters of liquefied natural gas, and plans to increase production capacity by 16 million tons every year.
Qatar is betting that market demand for liquefied natural gas (LNG) will continue to grow in the coming decades, and the country is launching a new multi-billion dollar project to expand exports.
“We need more gas to the world, we need more players,” Qatar's energy minister Saad Al-Kaabi said in an interview on Sunday. The Middle Eastern country is already one of the world's largest exporters of liquefied natural gas and plans to increase production capacity by 16 million tons per year. This is in addition to the previously announced annual expansion of 49 million tons.
Saad Kaby said that as the global economy recovers, population growth, particularly in Asia, will drive demand. He said Qatar is also seeking to lock in more deals in Europe. He expects the new gas production expansion project to be completed by 2030, when Qatar's annual production of liquefied natural gas will reach 142 million tons.
While Qatar has decided to invest more in gas production, countries are switching from fossil fuels to alternative fuels and anticipating an oversupply of natural gas, and projects elsewhere have come to a standstill. Some analysts, including the International Energy Agency (IEA), say global gas demand may peak as early as 2030.
The current production of liquefied natural gas in the US is roughly equivalent to Qatar's. The US has suspended the issuance of new export licenses for 14 months after considering the impact of increased natural gas exports on the climate, economy, and national security. According to Saad Kaby, the decision would hit small US producers that rely on long-term sales agreements to support investment in liquefied natural gas projects.
“If the government could block this process every day, buyers wouldn't go to these sellers,” he said. “Under these circumstances, it's difficult to make long-term plans.”
Natural gas prices have fallen sharply in recent months, partly due to mild weather and weak demand, but also because Europe's energy crisis has subsided. Saad Kaby said that as one of the world's lowest-cost gas producers, Qatar is not fully affected by global price fluctuations. “If there is a price slump, we will be better able than other countries to deal with it,” he said.