Singapore - Qatar Petroleum, the world’s top liquefied natural gas (LNG) producer, is cranking up the pressure on high-cost rivals with bold expansion plans that will boost supplies over the coming decade and potentially push prices down further.
As competitors struggle to break even due to lower prices, the Qatari firm last month announced it will boost LNG output by about 40% to 110 million tonnes per annum (mtpa) by 2026 in phase one of its expansion of North Field LNG, the largest single LNG project ever sanctioned.
The company is expected to announce second phase expansion plans this year which will lift LNG capacity by 2027 to 126 mtpa, enough to meet the total import needs of both Japan and South Korea - the world’s top and third largest LNG importers respectively.
Qatari marketing has the potential to undercut competing suppliers and has already helped put downward pressure on LNG contract prices over the last two years, Credit Suisse analyst Saul Kavonic said.
“With this decision, (Qatar) will once again reaffirm its dominance as the largest LNG supplier in the world,” said Chong Zhi Xin, a director at research firm IHS Markit.