QatarEnergy is in talks with Japanese energy companies over a long-term supply deal for liquefied natural gas from the expanded North Field.
According to an exclusive Reuters report that cited unnamed sources, the volume under discussion is a minimum of 3 million tons annually, to be split between several Japanese companies, which include heavyweights JERA and Mitsui & Co.
Qatar is already the largest supplier of LNG to resource-scarce Japan. The deal, over the Reuters sources, would strengthen the Gulf state’s dominant position on the Japanese market at a time of intensifying competition between LNG producers.
Qatar is investing billions in the expansion of its section of the world’s largest natural gas field. Plans were initially to boost LNG production twofold by 2030, from under 80 million tons annually. Then, last year, Qatar decided to go further and boost LNG capacity by as much as 85% by 2030. That would be equal to a total of 142 million tons of liquefied gas annually.
Meanwhile, QatarEnergy is securing long-term demand for all that LNG. Last year, it signed a supply deal with Kuwait for another 3 million tons of LNG annually over a period of 15 years. Iraq is a potential buyer. But it is Asia that is the key market for LNG suppliers—except for the U.S., which ships LNG to Europe. And within Asia, Japan is a much sought after buyer because of its almost complete dependence on imports of energy. Last year, Japan’s total LNG imports reached 65.89 million tons.
“Asia-Oceania currently accounts for more than half of our procurement sources. For supply stability, expanding options to regions like North America and the Middle East would be beneficial,” the head of JERA’s financial strategy and planning division said at a recent earnings call, as quoted by Reuters.
By Irina Slav for Oilprice.com
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