Exports from Texas to begin this quarter
Doha’s production was hit by Iranian attack
A joint venture between QatarEnergy and Exxon Mobil has secured US approval to export its first liquefied natural gas cargoes from Texas.
Golden Pass LNG gives Doha access to supply outside the Gulf after Iranian missile strikes knocked out nearly a fifth of domestic production.
Analysts say the new capacity will not offset the losses but could accelerate Qatar’s push into overseas projects while it rebuilds at home.
“[The] disruptions have shown that even a highly efficient and large-scale export base can be vulnerable to geopolitical risks,” Vladimir Chernov, oil and gas analyst at Nasdaq-listed Freedom Finance Global, told AGBI.
After the current shock, “a balanced model looks more resilient, combining cost efficiency at home with diversification and risk management abroad.”
Repairs at Qatar’s Ras Laffan complex – the world’s largest centre for LNG exports – are expected to take three to five years. Iranian strikes last month during an escalation of the US-Israeli war against Iran wiped out an estimated $20 billion in annual revenue and forced QatarEnergy to declare force majeure on long-term contracts.
Force majeure is a mechanism enabling a party to terminate or suspend a contract due to an unexpected and exceptional event, without being liable for damages.
Force majeure explained
Tehran has retaliated to strikes on its territory with attacks on regional energy infrastructure and by choking tanker traffic through the Strait of Hormuz, a route that carries about a fifth of global oil and LNG flows.
The Golden Pass LNG project, in which QatarEnergy holds a 70 percent stake and ExxonMobil 30 percent, has a total planned capacity of approximately 18 million tonnes annually.
It is expected to begin exports this quarter after receiving approval from the Federal Energy Regulatory Commission this month, giving Qatar exportable supply away from the war.
“We don’t expect sufficient Golden Pass volumes this year to offset Qatari disruptions,” Ademiju Allen, natural gas analyst at global research consultancy Energy Aspects, said.
He said the first train will supply about 6 million tonnes a year. Ras Laffan’s 77 million tonnes of capacity has been reduced to about 64 million tonnes following the attacks.
The disruption is threatening energy security, particularly in Europe and Asia, the world’s largest LNG-importing regions and major buyers of Qatari gas.
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Qatar accounts for about 20 percent of global LNG supply.
“QatarEnergy will continue to expand domestic LNG production, where it has one of the lowest cost bases globally [and] it will increase investments in international projects to reduce reliance on a single region and gain more flexibility in its supply portfolio,” said Chernov.
Gulf interests
Kristy Kramer, head of LNG strategy at analyst Wood Mackenzie, said other Gulf producers have been building positions in US LNG.
Abu Dhabi state oil company Adnoc took an equity stake and secured offtake from NextDecade’s Rio Grande LNG project in 2024 while Saudi Aramco secured offtake from Rio Grande LNG and Commonwealth LNG.
Regional funds are also investing, Kramer said, including Abu Dhabi Investment Authority in Sempra Infrastructure and Cheniere Energy, and Mubadala in Caturus.
ReutersGolden Pass LNG is expected to produce 6 million tonnes a year at first
Adnoc, via its new XRG investment unit, is advancing LNG projects in Argentina with Eni and YPF.
JP Lacouture, principal insight analyst for LNG and natural gas at Kpler, said the first Golden Pass train could help QatarEnergy make “minor inroads” with customers and “have a larger presence in spot LNG markets” as most Ras Laffan exports remain tied to long-term contracts.
Saad Sherida Al-Kaabi, the Qatari minister of state for energy affairs and QatarEnergy’s chief executive, said in a statement that the start-up of Qatar’s Golden Pass investment comes at a time when energy security “ranks very high” on agendas worldwide. “We are now seeing the first fruits of this far-sighted strategy … which will play an important role in supporting global energy security,” he said.