Foreign Affairs

Qatar Poised To Become Top Overseas Buyer Of American Gas As Iran War Chokes Its Own Exports

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Qatar is poised to become the top buyer of American liquefied natural gas within a decade as the Iran war chokes its own exports.

State-owned QatarEnergy is expected to control 23.7 million tons a year of U.S. LNG by 2033, more than any other buyer, according to Wood Mackenzie, a research firm, the Financial Times reported Wednesday.

That total includes two long-term deals QatarEnergy secured in late October and its 70 percent stake in the Golden Pass LNG export plant in Texas, the FT reported. None of the gas will go to Qatar itself, and the company will resell it to other countries instead.

QatarEnergy will probably strike two or three more U.S. supply agreements, Jason Feer, global head of business intelligence at the energy and shipping broker Poten & Partners, told the FT.

QatarEnergy agreed Oct. 22 to buy as much as four million tons of Cheniere Energy’s LNG a year through 2054, both companies said. A week later, it signed for as much as three million tons a year over 20 years from Woodside Energy’s Louisiana LNG project, Woodside announced.

“These additional volumes make QatarEnergy the largest buyer of LNG from the U.S.,” QatarEnergy CEO Saad Sherida al-Kaabi said in an Oct. 29 statement. Al-Kaabi also serves as Qatar’s minister of state for energy affairs.

When asked whether the Department of Energy should consider who is buying when approving new export capacity, Paul Cicio, president and CEO of the Industrial Energy Consumers of America, a group of manufacturers that rely on natural gas, pointed the Daily Caller News Foundation to the legal test for gas exports.

“The Natural Gas Act that governs LNG export approvals requires that the exports must ‘not be inconsistent with the public interest,'” Cicio said in a statement to the DCNF.

The law requires regulators to approve an export application unless they find the exports “will not be consistent with the public interest.”

Al-Kaabi told Reuters in an Oct. 29 interview that the deals are part of a trading plan, one meant to make money for QatarEnergy if shipping in the Strait of Hormuz is disrupted later on.

“In a scenario where you have a closure of the strait, which is the true contingency that we’re looking to have, you’d immediately see a spike in gas price and you’ll be able to generate revenue for QatarEnergy that otherwise wouldn’t be generated,” al-Kaabi told the outlet.

The Qatari Embassy said it would forward the DCNF’s request to QatarEnergy and recommended al-Kaabi’s Reuters interview. Woodside and Golden Pass LNG did not immediately respond to the DCNF’s requests for comment.

Al-Kaabi also said the American gas cannot stand in for QatarEnergy’s own supply to long-term customers, because their contracts call for delivery from specific terminals to specific places, according to Reuters.

The two new deals together cover as much as seven million tons a year. QatarEnergy is aiming for volumes “much higher” than that and is talking with “everybody,” including Venture Global, al-Kaabi told Reuters.

“Twenty-five years ago my White House colleagues and I worried the U.S. would become as dependent on Qatar for LNG as we were on OPEC for oil,” Bob McNally, who advised President George W. Bush on energy and later founded Rapidan Energy Group, said in a Nov. 3 column by Reuters’ Ron Bousso.

“Then came the shale revolution and Iran War, and now Qatar is buying from us,” McNally added.

QatarEnergy stopped producing LNG in early March after days of Iranian missile strikes and notified affected buyers of force majeure March 4, according to Reuters. The company has since extended force majeure through the end of 2026, Reuters reported.

Force majeure, French for “superior force,” is a contractual clause that frees parties from liability due to unforeseen circumstances.

Every Qatari LNG cargo has to cross the Strait of Hormuz, Reuters noted.

Two of the 14 LNG production trains QatarEnergy runs at Ras Laffan were hit by an Iranian missile strike in March, cutting Qatar’s export capacity by about 17 percent, according to Reuters. Al-Kaabi told Reuters the repairs will take about three years.

QatarEnergy has worked its shipments back up to roughly one-third of prewar levels as of October, after they fell to nearly zero in March, according to Semafor.

QatarEnergy has turned to American gas before. By late July, it had bought 33 spot cargoes of American LNG for buyers in South Korea, Taiwan, Bangladesh, India and Japan, Reuters reported, citing trade and industry sources. Reuters put their value at about $1 billion.

QatarEnergy will pay for the Cheniere gas based on Henry Hub, the main U.S. natural gas price benchmark, plus a fixed fee, Cheniere said. QatarEnergy said that it expects those deliveries to begin in 2031.

One million tons a year of that supply is dependent on Cheniere proceeding with the first phase of an expansion at its Sabine Pass plant in Louisiana, Cheniere said.

Woodside said its supply will begin once the second of Louisiana LNG’s three production units starts up, then reach three million tons a year when the third one does. QatarEnergy said it expects those deliveries to begin in 2030.

Woodside said it is aiming for first LNG from the project in 2029.

ExxonMobil holds the other 30 percent of Golden Pass, which shipped its first cargo April 22, the Energy Information Administration noted, citing the project’s developer.