QatarEnergy is in discussions with various producers to obtain multi-year contracts for US liquefied natural gas extending through 2031 to compensate for the capacity lost due to Iranian strikes that will take years to fix, as per reports.
Conversations are taking place with Venture Global, Cheniere, and Woodside, according to reports.
The discussions regarding the contract are a part of the company’s initiatives to recover lost outputs from its Ras Laffan site after two of its 14 LNG trains and a gas-to-liquids (GTL) plant were harmed by Iranian attacks in March, the sources reported.
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The talks signify a transition from QatarEnergy's acquisition of numerous US spot LNG cargoes to fulfill obligations to certain Asian customers, indicating it is now pursuing longer-term strategies to address the deficit.
In March, QatarEnergy CEO Saad al-Kaabi stated that the repairs would suspend 12.8 million tons annually of LNG capacity for a duration of three to five years.
After stopping production in March, QatarEnergy has issued monthly force majeure notices, recently extending them to November, with additional extensions likely due to the ongoing closure of the Strait of Hormuz.
QatarEnergy Trading, the trading division of QatarEnergy overseeing 10 million tons of the company's LNG portfolio, is looking for 2-3 million metric tons yearly until 2031.
According to data gathered by research company Rapidan Energy, US construction projects have a combined total of 25 million metric tons of LNG ready for sale.
Venture Global possesses the largest LNG supply with 10 mtpa uncontracted, while Cheniere and Woodside Energy each have 6 mtpa available for sale, and Sempra's Port Arthur LNG project has 3 mtpa available, according to Rapidan data.
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Typically, around 80 percent of Qatar's LNG exports go to buyers in Asia.
"Qatar's current pursuit of long-term LNG volumes from other producers to help Qatar deliver into their customer contracts indicates that Qatar now sees risk to their ability to export LNG for several years," said Saul Kavonic, head of energy research and advisory at MST Marquee.
"It signals that Qatar considers the disruption of the Strait of Hormuz may prove longer lasting, and the damage to Qatari LNG infrastructure has been more extensive and may take longer to repair than initially hoped," he adds.
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Amid uncertainty regarding the resumption of flows through the key waterway, numerous clients in Asia began exploring options other than Qatari LNG.
Certain market players are evaluating scenarios where Qatari gas is unavailable.