QatarEnergy rejects pipeline for gas exports, says LNG makes no sense

QatarEnergy has dismissed the idea of exporting its gas via pipeline, stating that it is not economically viable according to the company. In a statement at the Qatar Economic Forum Special Edition in New York, QatarEnergy CEO Saad al-Kaabi, who is also minister of state for energy affairs, said that the company would be "the largest LNG trader in the world by far" and moving its gas via pipeline would make no economic sense.

QatarEnergy's LNG expansion faces delays

The disruption caused by the effective closure of the Strait of Hormuz since the US and Israel began their war on Iran has delayed the first train of the North Field East (NFE) liquefied natural gas expansion project, which was expected to start production in the first half of 2027. QatarEnergy is also working on the North Field South (NFS) expansion project, which is set to begin production in 2028. However, the ongoing crisis is causing significant delays in equipment delivery, as al-Kaabi highlighted during his speech.

Damage from Ras Laffan attacks

The attacks on Ras Laffan, Qatar's main export hub, have caused extensive damage, wiping out 17% of the country's LNG capacity. Two LNG trains, which produce a combined 12.8 million tons per annum, were damaged, and repairs are expected to take up to five years. One gas-to-liquids (GTL) plant is also under repair and is scheduled for completion in the first quarter of 2027.

Golden Pass LNG project

Despite the disruptions, QatarEnergy is proceeding with its plans to expand its liquefied natural gas production capacity. The company is working on the Golden Pass LNG project in Texas, a joint venture with ExxonMobil, which is expected to be fully operational in 2027. The project is anticipated to produce 18 million tonnes per year of LNG. QatarEnergy continues to expand its trading business, aiming to become the largest LNG trader globally.

Reopening of Strait of Hormuz

With the Strait of Hormuz expected to reopen, QatarEnergy has stated that it could return its LNG capabilities to normal levels within a couple of weeks. This statement was made by Qatar's Energy Minister, Saad al-Kaabi, during a session at the Qatar Economic Forum. Al-Kaabi emphasized that the attacks on Ras Laffan have significantly impacted the country's gas operations, with QatarEnergy producing very little LNG currently.

What this means for operators

The disruptions in the Strait of Hormuz are likely to impact global LNG markets, particularly for operators relying on shipments through this critical passage. Operators should monitor the situation closely and consider alternative shipping routes or storage options to ensure continuity of supply. Additionally, the expansion plans of QatarEnergy could lead to increased competition in the LNG trading market, affecting the strategies of existing players.