War in Iran upends energy markets! Major producing country Qatar will purchase LNG from the United States until 2054

Qatar Energy has reached a long-term LNG purchase contract with Chenier Energy Company of the United States. (European News Agency)

[Compiled by Wei Guojin/Taipei Report] Before the Iran war, Qatar was the world's second-largest natural gas exporter after the United States. However, eight months later, the Gulf country is now purchasing natural gas from its main competitor. This situation shows that the Iran war has upended the global energy market, benefited American companies, and further consolidated the United States' dominance in liquefied natural gas (LNG) exports.

CNBC reported that Qatar Energy reached an agreement with Cheniere Energy of the United States on the 22nd to purchase 4 million tons of LNG per year until 2054. The purchase price is based on the natural gas price of Henry Hub in the United States, plus a fixed fee, and natural gas delivery is scheduled to begin in the 2030s.

Cheniere Energy CEO Jack Fusco said in a statement, "We look forward to a stable supply of Qatari energy from the Sabine Pass and Corpus Christi gas fields into the second half of this century."

Alex Munton, director of global natural gas and LNG at Rapidan Energy in Houston, pointed out that although Duha’s purchases from the United States are less than 1% of the global LNG transaction volume of more than 400 million tons, in terms of a single transaction, the scale is quite large.

Before the Iran war, Qatar was the world's second-largest LNG exporter, second only to the United States. However, after Iran attacked its key Ras Laffan production facility, its production plummeted. Related attacks severely damaged two production lines, causing Qatar's LNG export capacity to shrink by 17%.

Qatar Energy Minister Saad Sherida Al-Kaabi said the restoration of Ras Laffan will take three years. Since the attack in March, Qatar has cited "force majeure" factors every month to indicate that it is difficult to meet its contractual obligations.

Kaabi said in an interview last month that Iran's attack will cause a heavy blow to Qatar's production capacity in the next few years; "Qadda's LNG exports are very scarce now, and we cannot export natural gas through the Strait of Hormuz; although some ships have passed through the Strait, the number is very small, so small that it cannot even be calculated in percentage."

Even if Ras Laffan's output facility is repaired, Hormuz's safety situation remains unclear. Monton said the signing of the decades-long contract with Chenir shows Qatar believes that freedom of navigation in Homouz may never be possible given Iran's continued attacks on oil tankers.

He added that since LNG is basically a shipping product, it is difficult to find an export method that bypasses Homez. He said, "Liquefied natural gas is transported by shipping, so it requires sea lanes. Qatar must go through the Strait of Hormuz. There is no other way for LNG to enter the market. They are trapped."