QatarEnergy Offsets Regional Woes with U.S. LNG Offtake

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

QatarEnergy was forced to sideline its own LNG production because of the war raging in the Middle East. On Thursday, the company's energy minister said that was offset by U.S. sources of the super-cooled gas.

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QatarEnergy Takes First Cargo from Golden Pass

While regional production is sidelined by war, QatarEnergy on Thursday lauded its debut offtake of liquefied natural gas (LNG) from Golden Pass in Texas, among its largest investments in the U.S. market. According to Industrial Info Resources data, the Golden Pass facility has a US$3.8 billion total investment value. In terms of output, the facility is small, with a peak feed gas rate at 380 million cubic feet per day. That compares to Sabine Pass, operated by Cheniere Energy with a feed gas rate of 4.5 billion cubic feet per day (Bcf/d).

Golden Pass is a joint venture between QatarEnergy and ExxonMobil. "The Golden Pass LNG project is one of the single largest investment decisions in the history of the U.S. LNG sector, affirming QatarEnergy's position and reputation as a reliable provider and a trusted partner of choice that drives growth and development around the world," said Saad Sherida al-Kaabi, the Qatari energy minister and head of QatarEnergy.

Industrial Info Resources put the feed gas rate for Golden Pass at around 360 million cubic feet for Thursday.

"Golden Pass LNG feed gas flows started in mid-February and have accumulated to over 16 billion cubic feet to date, reflecting a steady ramp as the facility prepares for its first export cargo," said Maria Sanchez, a senior natural gas analyst at IIR Energy. "Recent data shows intake levels climbing toward around 400 million cubic feet per day during commissioning."

U.S. federal regulators in mid-December gave joint venture partners ExxonMobil and QatarEnergy the green light to start operations from the first liquefaction unit, or train. Natural gas to the facility started at a trickle earlier this year.

The debut cargo was loaded onto QatarEnergy's carrier Al-Qaiyyah, a vessel recently built in South Korea with a design capacity of 6.1 million cubic feet of gas in the liquid form. Some 70% of the facility's capacity, drawn from U.S. inland shale deposits, is slated for offtake by QatarEnergy's trading division.

"The commencement of LNG offtake from Golden Pass LNG will complement QatarEnergy Trading's global LNG portfolio and support the growth of its business," the company said.

Trouble at Home

QatarEnergy declared force majeure, a contractual clause freeing it from its obligations due to circumstances beyond its control, on its deliveries in late March due to war. The largest LNG company in the world, QatarEnergy had stopped LNG production from facilities in the Ras Laffan and Mesaieed industrial cities early that month.

The Iranian attack on QatarEnergy was seemingly in response to Israeli airstrikes on Iran's South Pars natural gas field in the Persian Gulf. Iran shares that field with Qatar, where it's called North Dome. Combined, it's the largest natural gas field in the world.

QatarEnergy estimated that about 12.8 million tons per annum (MTPA) of gas in the liquid form would be sidelined for as long as five years because of the attacks. That's a little less than half of the export capacity of Sabine Pass.

U.S. President Donald Trump urged the Israeli military to avoid targeting energy infrastructure in the region. He made similar requests after Israeli forces hit fuel depots in Tehran earlier in the conflict, but later vowed to wipe out Iranian civilian infrastructure should Iran continue to keep the Strait of Hormuz closed.

By the Numbers

• 12.8 MTPA of LNG sidelined by U.S. war with Iran
• 400 million cubic feet per day during commissioning for Golden Pass

Key Takeaways

• Qatar draws on U.S. natural gas for more LNG exports.
• QatarEnergy's own supplies are disrupted by war.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).