The Middle East needs alternative export routes for liquefied natural gas that bypass the Strait of Hormuz, Oman’s Minister of Energy and Minerals said at Gastech today. LNG exports from the Persian Gulf have collapsed since the start of the war between the United States and Israel and Iran.
“Let’s identify alternative export options,” Salim Al-Aufi said at the Gastech conference in Thailand, as quoted by Bloomberg. “Be it north or through Oman or through Yemen. Diversify your options to get the resources out of the area.”
Such alternative routes would necessitate the construction of new pipelines, which will take time and will immediately turn them into new targets for drone and missile strikes, in light of the latest Yemeni strikes on Saudi Arabia’s East-West pipeline.
Oman itself produces over 11 million tons of liquefied natural gas annually. This year, the Oman LNG hub has been running at over maximum capacity to make up for lost supply from neighbor Qatar, which was the biggest producer in the region. According to a mid-July report from MEES, the Gulf state was producing liquefied gas at a rate exceeding the nameplate capacity of its three trains, which is 11.4 million tons per year.
Meanwhile, the president of Chevron’s Australian operations predicted that liquefied natural gas prices will remain higher for longer. “I have a hard time seeing the prices come down,” Balaji Krishnamurthy told Bloomberg today, expecting prices to remain elevated for at least another six months.
An earlier report from Reuters cited unnamed sources as saying QatarEnergy was seeking LNG deals with U.S. producers to make up for its lost domestic supply due to damage from Iranian strikes. The company is looking at long-term deals through 2031, which suggests the restart of Ras Laffan would take quite a while, potentially contributing to an even longer period of inflated LNG prices.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Oil Prices Surge as Middle East Attacks Continue and Diplomacy Stumbles
- White House Weighs Defense Production Act as U.S. Refineries Maxed Out
- WTI Breaks $100—and This Rally Has Legs
