Qatar’s LNG Expansion to Lead to Oversupply, Decline in Gas Prices

Qatar’s latest announcement to further increase LNG export capacity is expected to lead to LNG oversupply, which will increase risks, especially from 2026, that global gas prices decline to supply cash costs below $4.70/mmBtu, or 15 EUR/MWh, potentially leading to the cancellation of US LNG exports, similar to 2020, Goldman Sachs said in a note.

• The bank expects more than 200mtpa of added global LNG supply capacity before 2030, around 50% of the 409mtpa of global LNG supply seen in 2023.
• Annual Asian LNG import growth has averaged 18mtpa for the past several years, excluding 2020 and 2022 amid China’s lockdown and the global pandemic.
• Qatar announced a new 16mtpa LNG project before 2030, lifting the country’s annual production capacity to 142mn tons by 20230, Qatar’s energy minister Saad Al-Kaabi said on Sunday.
• The country’s current LNG export capacity is around 77mtpa, or 105-108bcm. The latest announcement would add another 22bcm/yr by 2030. In addition, the North Field East expansion is expected to add around 45bcm/yr, followed by the North Field South expansion with 22bcm/yr, IEA analyst, Greg Molnar, said.