LNG oversupply looms but Qatar poised to boost leadership
Tribune News Network
Doha
The world is on the cusp of a liquefied natural gas (LNG) oversupply that could reshape global energy markets for years to come, the Al-Attiyah Foundation reports in its latest Energy Research Paper, Navigating the LNG Oversupply: Market Dynamics and Future Challenges.
Yet amid the turbulence, Qatar is uniquely positioned to strengthen its leadership, thanks to its low-cost production, strategic expansion plans, and growing list of long-term partnerships with key global markets.
Between 2025 and 2029, at least 200 million tonnes per annum (Mtpa) of new LNG capacity (equal to half of today's global output) is expected to flood the market.
LNG supply is projected to exceed demand by 63 million tonnes by 2030 if all under-construction projects proceed on schedule, Bloomberg's Global LNG Market Outlook 2030: Focus on Supply Risks states. However, project delays and sanctions, particularly against Russia, have already removed an estimated 21 million tonnes of supply by the end of the decade, softening the oversupply outlook.
Despite a short-term tight market, LNG supply is forecast to outpace demand from 2027 onwards. Still, Qatar's advantages remain clear.
Its North Field expansion projects, including the recently launched North Field West, will boost the nation's export capacity by 85% by 2030. QatarEnergy's low-cost production at around $6/MMBtu, which is significantly below new U.S. projects at $9–10/MMBtu, ensures the country can remain profitable even in a lower-price environment.
Qatar's strength is reinforced by securing large, long-term supply agreements of up to 27 years with major buyers across Europe and Asia, including Italy, France, the Netherlands, and China.
These contracts provide Qatar with market certainty at a time when European and Asian buyers face growing uncontracted demand.
Europe's uncontracted LNG demand is expected to rise by 40% by 2030, while less than a third of Asia's expected demand increase is currently covered.
Meanwhile, the United States LNG exports are expected to grow by 15% this year, reaching almost 14 billion cubic feet per day, according to the EIA Short-Term Energy Outlook, Dec 2024.
However, U.S. flexibility comes with price sensitivity, and American projects face higher shipping distances and emerging regulatory hurdles.
In contrast, Qatar's strategic investment in infrastructure, its reputation for reliability, and its access to both European and Asian buyers position it to thrive in the next energy cycle.
As global LNG demand is projected to rise from 400 Mtpa today to over 600 Mtpa by 2030, Qatar's leadership will become even more critical.
While LNG markets are entering a period of significant change, Qatar's proactive strategy, flexibility, and resilience place it firmly on course to consolidate its position as the world's most influential LNG exporter for decades to come.
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