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Qatar LNG Output Falls As Desperate Market In Crisis Begs For More

LNG production in Qatar has fallen this year, even with increased calls for the fuel amid an energy crisis in Europe as the bloc attempts to wean itself off Russian gas, Bloomberg reported on Friday.

Qatar exported less than 35 million tons of LNG from January to May—a loss of 1 million tons from the same period in 2021, according to ship-tracking data compiled by Bloomberg.

The news comes just a few short months after Qatar wanted guarantees from Europe—leading up to Russia’s invasion of Ukraine—that the bloc would limit the resale of any LNG cargoes outside Europe on the spot market. Qatar also asked the EU to resolve an investigation dating back to 2018 into the Middle Eastern country’s long-term supply contracts.

But even then Qatar wasn’t talking about increasing production. It was considering increasing its shipments to Europe by diverting LNG cargos away from Asia.

Germany’s Economy Minister Robert Habeck recently visited Qatar with an eye to securing additional LNG cargo.

“Qatar is in the process of increasing its gas extraction and we need more gas in the short term to replace Russian supplies,” Habeck said at the time.

In 2021, Qatar made the FID on an LNG expansion project that would increase its annual capacity from 77 million tons to 110 million tons. But the $29 billion project isn’t set to be complete until 2025.

According to Bloomberg, Qatar managed to export 84 million tons of LNG last year, despite its stated 77 million ton annual capacity.

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Germany has plans to build two import terminals to receive shipped LNG when it locates a source. But last month, Germany and Qatar hit a roadblock in their talks over long-term LNG deals. Qatar is looking for long contracts, while Germany is looking to leave room to transition away from fossil fuels.

By Julianne Geiger for Oilprice.com

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