Qatar to boost LNG production capacity to 110 million mt/year by 2024-minister
Qatar, the world’s largest LNG producer, is on track to expand its LNG production capacity by around 43% to 110 million mt/year, Mohammad Bin Saleh Al-Sada, Minister of Energy and Industry, said at the LNG Producer-Consumer Conference in Nagoya.
This is the latest update to Qatar’s LNG expansion plans and its largest production forecast till date compared to its current production capacity of 77 million tons/year. It had initially stated plans to reach 100 million mt/year by 2020, following the lifting of a 12-year moratorium on the development of its offshore North Field in 2017.
The rapid pace of Qatar’s expansion will allow it to maintain its position as the world’s top LNG exporter despite competition from Australia that expects to have 88 million mt/year of nameplate LNG export capacity if all its 10 projects reach full capacity.
Qatar’s plans to increase its LNG production to 110 million mt/year will help meet the forecasted shortage in global LNG supply starting from, or even earlier than, the mid-2020s due to emerging market demand growth, Al-Sada said. “This production is planned to commence by 2024,” he added.
The International Energy Agency said in its Gas 2018 report that global LNG export capacity is ramping up by the end of 2020, but this oversupply could be short-lived due to the pace of LNG demand growth in Asian markets.
“Without new investment, the continuous growth of the LNG trade could result in a tight market by 2023. Owing to the long lead time of such projects, investment decisions need to be taken in the next few years to ensure adequate supply through the 2020s,” according to the Paris-based energy think tank.
Al-Sada said Asian economies will be the main contributor to LNG demand growth, and traditional LNG consuming markets like Japan, Korea and Taiwan will be supplemented by new LNG demand from China and India.
“In 2017, China and India have increased their LNG imports by a combined 14 million tons per annum to reach 38 and 22 million tons/year respectively,” Al-Sada said, adding that China is expected to raise the share of natural gas in its energy mix to 15% by 2030.
Demand growth for LNG in India and China is underpinned by environmental considerations and internal market reforms, and by 2040, LNG volumes are expected to exceed natural gas delivered by pipeline to make up the bulk of gas trades for the first time, Al-Sada said.
He said, with regard to market fundamentals, the challenge for the LNG industry is to find a balance between buyers’ need for competitive prices and supply flexibility, and a healthy cash flow for producers.