Currently, Qatar and the United States LNG export powerhouses already hold 40% of the global supply.
Qatar and the United States are leading the race by a significant margin as the top liquified natural gas (LNG) exporters in the world, appropriately positioned to meet the rising global demand for increased supply capacity in the next 20 years.
Wood Mackenzie’s July assessment attributes the export capacity growth of the world’s current top two LNG exporters to their abundant reserves of cost-effective natural gas resources.
Qatar and the US’ competitive pricing and strategic commercial partnerships position them to potentially secure a combined market share surpassing 60% by 2040. Currently, the two LNG export powerhouses already hold 40% of the global supply between one another.
To maintain their leading roles in the next wave of LNG supply, both the Gulf nation and the US, along with other LNG developing and exporting nations, are focusing on three crucial factors: cost management, efforts to lower emissions from LNG projects, and capitalising on the ongoing growth in LNG demand from Asia, the report detailed.
Experts have forecasted an optimistic outlook on the long-term prospects of global LNG demand.
WoodMac’s gas and LNG experts, Massimo Di-Odoardo, Giles Farrer, and Dulles Wang speculate that to keep up with the growth in demand by the mid-2030s, an additional capacity of 100 million metric tonnes per annum (mmtpa) will be required.
This constitutes a substantial 25% increase compared to the current global LNG supply, in addition to the supply that has already been approved and sanctioned.
Despite the current European rush to secure LNG and replace Russian gas, even through long-term contracts, which were previously viewed with scepticism in Europe until the Russian invasion of Ukraine, WoodMac’s experts assert that Asia will be the key driver of demand in the long term.
“Europe’s policy pivot away from gas limits upside for LNG suppliers beyond 2030. Thereafter, it’s all about Asia as the region’s developing economies lean more heavily on gas while striving to move away from coal,” Wood Mackenzie’s analysts say.
Earlier this year, Shell predicted a significant increase in LNG demand in Europe, leading to intensified competition with Asia in the short term and potential dominance in LNG trade in the long run.
A surge in new supply, particularly from Qatar and the United States, is expected to enter the market in the next few years, according to Shell. About 80% of the new LNG supply expected by 2030 will come from these major LNG exporting countries.
European countries last year turned to Qatar at the onset of the Ukraine crisis as they scrambled to ditch their reliance on Russian gas. The region previously received 40% of its gas supplies from Russia as almost a third of its shipments passed through Ukraine.
The Gulf state’s energy minister said earlier in July earlier that Qatar is set to dominate 40% of all the new LNG that will enter the market by 2029 due to its mega energy projects.
Qatar’s GDP growth is due to its boosted hydrocarbon exports of 10% as well as its multi-billion plan North Field expansion project, which is the largest of its kind, seeking to boost Qatar’s annual LNG production capacity from 77 million metric tonnes to 126 million tonnes by the year 2027.