ALBAWABA - QatarEnergy has been buying long-term liquefied natural gas (LNG) from the U.S. and other markets in a strategy to generate revenue if the Strait of Hormuz is disrupted in the future, according to CEO Saad Sherida Al-Kaabi.
The move would set a precedent as one of the world's largest LNG producers – Qatar – which accounts for a fifth of global LNG exports, plans to get its LNG from somewhere else to offset lost income from the Iran war and protect revenue against Strait of Hormuz disruptions.
The Qatari energy firm signed an agreement to buy 3 million metric tons per year (MTPA) from Woodside's US facilities for 20-years; alongside two other similar agreements with Cheniere Energy for up to 4 MTPA through 2054.
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Qatar's energy minister says the new volumes make QatarEnergy the LARGEST buyer of U.S. LNG in the world. That comes just a week after it signed a separate deal for 4 million tonnes a year from Cheniere
When the Strait of Hormuz gets choked off, Gulf's gas behemoths are turning to DONALD TRUMP'S United States. Imagine that. Told them so!
"There's more to come," CEO Kaabi said; Cheniere deliveries are not expected to begin until 2031.
"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," CEO Kaabi, who is also the minister of state for energy affairs, said of the plan.
The strategy proposed by Kaabi doesn’t require any capital spending or infrastructure and completely relies on QatarEnergy's LNG expertise, trading operation and shipping fleet.
"In normal circumstances you'd make a reasonable return and in critical circumstances — however that comes out and how long it is — you have actual proof today of what you could make."
Kaabi said he expects QatarEnergy to sign more 20- to 25-year supply agreements with U.S. and other producers this year as the company’s targets are much higher than 7 MTPA.
He additionally remarked that the company is in talks with “everybody” indicating it would buy from whichever supplier offered the best commercial terms.
Pshemaf Choiaqo is a digital marketer with a passion for media, style, and presentation.
He enjoys researching unorthodox and nonconventional subjects almost as much as he enjoys writing about them.
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