Qatar says LNG market not oversupplied as it prepares to add 23mmt to global market
Qatar is planning to add 23 million mt/year of export to the global LNG market, just as it disagrees the market is not currently oversupplied.
Mohammed al-Sada, Qatar’s oil minister Monday is reported to have said there could be a small LNG supply surplus in the early 2020s, but the market would remain effectively balanced until 2024.
“There is no LNG supply glut,” Sada said. “There may be a surplus of only 10 million mt/year of LNG in the early 2020s [but] in a 350 million mt/year LNG market, this means that the market is practically in balance,” he said.
However, there are glut concerns as reports have it that a number of new LNG projects are due online in the coming years, especially from Australia and the US. To this end, some market observers have predicted demand would struggle to keep up with the supply growth.
But strong Asian demand for LNG, especially in China, has seen LNG spot prices rise and the market remain tight in recent months. Equally a lack of final investment decisions for new projects over the past few years has also meant there could be a supply crunch in the 2020s.
“The global LNG market is expected to tighten up beyond 2024,” Sada said.
This is the same time frame for Qatar to make its new 23 million mt/year of capacity fully operational.
Qatar announced its plan to increase its LNG export capacity to 100 million mt/year from the current 77 million mt/year in July last year.
Qatar, he said, currently supplies about a quarter of the world’s total LNG.
“[Qatar] intends to remain the global leader in LNG supplies in the future as well,” he said, with the 30 percent increase to 100 million mt/year “to be fully operational by 2024.”
Under the expansion plans, Qatar will add three new 7.8 million mt/year trains.