March 13, 2024

Qatar vs US: the fight for number one LNG exporter

On 25 February, QatarEnergy announced plans to expand its liquefied natural gas (LNG) export capacity, increasing its North Field project by another 16 mtpa in a move that could raise the country’s LNG export capability to 142 mtpa by the end of the decade. The development, named North Field West, comes in addition to two other LNG expansion projects already underway at North Field East and North Field South. In total, Qatar's capacity is set to increase by over 80% from its current 77 million tonnes per annum (mtpa), positioning it to potentially regain the coveted title of the world's leading LNG exporter.

How do Qatari and US LNG exports compare currently?

With abundant reserves of cheap gas and a relatively small domestic market, Qatar has long been a world leader in the export of LNG. According to Kpler data, Qatar was the leading global LNG exporter from 2008 through 2021, at some points more than tripling the volumes of the next closest competitor. Though Qatari exports reached an apex of more than 80 metric tons (Mt) of LNG exports in 2022, Australia unseated Qatar as the top supplier in the world, a title that the US claimed in 2023. In 2024, Kpler Insight expects the US to further cement its number one position, with 87 Mt of LNG supply expected versus Qatar’s 79 Mt.

Qatar vs US annual LNG exports (Mt) | Source: Kpler

One of the driving forces behind Qatar’s loss of market share has been the steady state of its overall LNG export capacity. Qatar has maintained 77 Mt of LNG export capacity since 2011, though actual exports have often exceeded nameplate capacity. For instance, in 2015 and again in 2022, Qatar’s LNG exports topped 80 Mt annually, pushing utilization rates above 104%.

By contrast, the US has experienced a period of rapid and sustained capacity expansion since 2016 that has raised the country from a nascent player to a global leader. Since the initial train at Sabine Pass started in early 2016, US LNG export capacity has grown to over 90 mtpa, with an annualized utilization rate of 94% in 2023.

How is Qatar’s LNG export capacity expected to grow?

In April 2017, Qatar Petroleum lifted a 2005 moratorium on the development of the North Field and has since been working towards increasing its output. Recent appraisal drilling has led to a 14% increase in Qatar's claimed reserves, adding 240 trillion cubic feet to over 2,000 tcf total reserves, expanding potential gas supply and enabling a further expansion in its planned LNG export capacity. Qatar is undergoing significant expansions in its North Field project, aiming to boost LNG production capacity at Ras Laffan from 77 mtpa to 142 mtpa by 2030, representing an 85% increase from current levels.

The expansion will occur in three stages. The first phase, named the North Field East expansion, is expected to add four new trains by 2026, bringing online an additional 32 mtpa of capacity. Following this, by 2027, two more mega trains of 8 mtpa each will be added through the North Field South expansion. The most recent announcement is the North Field West expansion, introducing two additional mega trains of 8 mtpa each by 2030.

How is US LNG export capacity expected to grow?

With over 90 mtpa of LNG export capacity at seven liquefaction plants currently, the US will add at least 75 mtpa of additional capacity by 2030, taking into account only the five projects that are currently under construction. The in-service dates for these projects range from Cheniere’s 10 mtpa Corpus Christi Phase 3 expansion in expected online in late 2024, to Next Decade’s Rio Grande, for which the third train is anticipated in 2028. Both LNG facilities are located in the US Gulf Coast in Texas.

Additionally, there are eight US projects that have been fully permitted by regulatory authorities but have not yet reached final investment decision (FID). These pre-FID projects collectively account for for 97 mtpa of potential additional capacity, should the individual project sponsors decide to move forward with construction.

US LNG projects with regulatory approval but not FID (mtpa) | Sources: DOE, EIA, Kpler
Looking out to 2030, are there any barriers to the development of new LNG projects in the US?

For the five US projects currently under construction, Kpler Insight assumes each project enters service within the respective timelines, though some delays are possible. However, the permitted, pre-FID projects will likely not all reach full development, as each individual project sponsor works through numerous and varied financial and operational considerations.

Increasingly challenged are numerous US projects that have not yet received approval from the Federal Energy Regulatory Commission (FERC) and US Department of Energy (DOE). Many of these projects are temporarily caught in a regulatory holding pattern as the Biden Administration reconfigures the public interest determination for export permits to countries without free trade agreements (non-FTA), which is generally a necessary condition for an LNG export project. Launched in January, the pause of DOE permits is meant to allow policy makers to reassess the public interest considerations underpinning the authorization process, including the likely addition of greenhouse gas emissions assessments and a possible broadening of the evaluation of economic impacts. Kpler Insight expects the pause will likely remain in place until after the November US election, at which time either a different administration restarts non-FTA considerations or the current administration formulates an expanded and more far-reaching assessment. The regulatory uncertainty could freeze the prospects for some of these prospective projects or at the least delay their development timeline.

Can Qatar reclaim the top LNG exporter position from the US?

With its various expansions underway, Qatar’s LNG export capacity by 2030 is expected to be 142 mtpa, while the US is anticipated at 166 mtpa considering just the projects currently under construction, giving the US an edge over Qatar in terms of LNG capacity. Any additional US capacity that is sanctioned by the end of 2025 could theoretically also complete construction and be in-service by 2030, increasing total export capabilities in the country and further widening the gap from Qatar.

Qatar vs US annual LNG production capacity scenarios by 2030 (Mt) | Source: Kpler Insight

However, actual exports from each country will depend on factors such as plant reliability, LNG demand and price spreads, for example. Over time, these drivers could significantly swing in favor of either the US or Qatar, or work against both countries. All else equal, Kpler Insight expects Qatari exports to total 134 Mt in 2029, while the US is anticipated to export 158 Mt, putting the Qatar clearly behind the US.

Utilization rates could shift this dynamic. Higher utilization rates for Qatar combined with lower utilization rates in the US could flip the role of leading exporter. Kpler Insight assumes utilization rates for both Qatar and the US at 95%. If Qatar’s annualized utilization rate (UR) matched the 104% it operated in both 2022 and 2023, it would boost production to 149 Mt. At the same time, if URs in the US fell to 89%, Qatari production would outpace US exports. But additional US capacity would shift this balance almost universally in front of what Qatar could produce.

Qatar’s most recent expansion plans means LNG export capacity in the country looks to increase by roughly 85% from current levels. However, the US LNG capacity expansions already underway mean Qatar would be unlikely to reclaim the number one position by 2030. Any additional US developments beyond those already under construction would further cement the US in that role. Given the expansions, though, both countries stand to gain market share globally and continue to serve prominent roles in the world’s LNG supply.

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