DOHA: With the phenomenal boom in Qatar’s LNG supply, the hydrocarbon rich country is diversifying its export destinations. In 2007, it exported gas to eight different countries while in 2011 the number reached to 23 different nations, according to a report from QNB Group.
Through the 1990s and 2000s Qatar invested heavily in LNG production, with exports beginning in late 1996. Ten years later, Qatar was the world’s largest exporter and in 2011 it exported 76m tonnes of LNG, accounting for 31 percent of the global market. The next largest exporter was Malaysia with 24m, less than one-third of the tonnage.
In 2011, 47 percent of Qatar’s LNG exports went to the Asia Pacific region and 42 percent to Europe. Asia has been the primary export destination for some time, and received an even larger share in 2007 of 79 percent. This region is characterised by a shortage of hydrocarbon resources combined with rapidly rising demand for gas-fired power generation. The largest Asian destinations in 2011 were Japan (12m tonnes), India (10m) and South Korea (8m).
Europe’s share of Qatar’s LNG exports has increased significantly, mainly as the UK has had to replace declining gas production from its North Sea fields. The UK was the single largest importer of Qatari LNG in 2011. It has long-term sales and production agreements (SPAs) with Qatar for a total of 12m tonnes per year (t/y) and in 2011 purchased a further 4m tonnes of Qatari LNG on the spot market.
Other countries in Europe have also increased imports from Qatar to lower dependence on Russian supplies, and to reduce carbon emissions by using more, relatively clean, natural gas. Notably, this has led to increasing exports to Italy (6.1m tonnes in 2011), Spain (4.8m) and France (3.2m). Belgium imported 6.1m tonnes in 2011, up from 2.8m in 2007, some of which was re-exported through recently-expanded storage facilities at Zeebrugge port, designed to support the development of an LNG spot market.
According to QNB Group, Qatar is diversifying its LNG export destinations. In 2007, Qatar exported to eight different countries and in 2011 it exported to 23 different countries.
In 2011, export destinations included the Middle East (UAE and Kuwait) and South America (Argentina, Brazil and Chile). Exports to Argentina are set to rise after the signing of an SPA for 5m t/y starting in 2014. A new long-term SPA with Thailand is reported to have been signed and Qatar recently made the first delivery of LNG to Singapore. Jordan has expressed strong interest in importing LNG, and Qatar is helping it to build a regasification terminal in Aqaba.
Total LNG capacity is 77m tonnes. However, slightly less than this is usually exported owing to downtime for maintenance and repairs. Most of Qatar’s production goes towards meeting the long-term commitments of SPAs. In 2012, Qatar had SPA contracts for around 55m tonnes, or 73 percent of its production capacity. By 2014, SPA export commitments will increase to 64m tonnes, or 84 percent of total production. These new contracts are mainly to Asia Pacific and South America, meaning that Europe’s share of Qatar LNG exports is likely to fall.
The remaining production is exported on spot markets. In 2011, there was a rapid increase in the amount of Qatari LNG exports sold on the spot market to around 28 percent of production, up from 9 percent in 2010. Demand from Japan was particularly strong as the country shut down its nuclear power plants in the aftermath of a tsunami and needed more LNG as an alternative power source.
The Peninsula
