QatarEnergy Secures Major US LNG Supply Deal Amidst Hormuz Disruptions

QatarEnergy has entered into a significant 20-year agreement to procure up to three million tonnes per annum of liquefied natural gas (LNG) from Woodside Energy's LNG project located in Louisiana. This strategic move further solidifies Doha's engagement with US energy supplies, serving as a crucial hedge against potential disruptions in the Strait of Hormuz.

The LNG will be delivered on a free-on-board basis, with supplies commencing upon the operational start of the project's second train. Full delivery volumes of three million tonnes per annum are expected to be reached when the third train becomes active. The state news agency, QNA, anticipates the first deliveries to commence in 2030.

Saad Al Kaabi, Minister of State for Energy Affairs and President and Chief Executive of QatarEnergy, stated, "These additional volumes make QatarEnergy the largest buyer of LNG from the US." He further emphasized that the company's Golden Pass project in Texas, alongside its expanding portfolio of US purchases, underpins its "long-term growth and diversification strategy."

Liz Westcott, Chief Executive of Woodside, described the agreement as "a strong vote of confidence in Louisiana LNG." The Louisiana project, situated near Lake Charles, is designed with three trains and possesses a combined annual capacity of 16.5 million tonnes. Having reached a final investment decision in April of the previous year, it is targeting its first LNG exports in 2029.

This agreement follows closely on the heels of a separate deal struck just last week, where QatarEnergy agreed to purchase four million tonnes per annum from Cheniere through to 2054. The Golden Pass project commenced its exports in March.

The deal also coincides with QatarEnergy's ongoing extensions of force majeure on its own shipments. This week, Italy's Edison reported that the Qatari state company has extended force majeure on deliveries until the end of December, a shift from the earlier planned early December cessation. Buyers in Pakistan and Bangladesh have also been informed that these notices will remain in effect until year-end, according to Reuters. Petrobangla, the Bangladeshi state oil and gas company, indicated it has been acquiring spot cargoes at a "significant cost." An earlier incident involving an Iranian strike on Ras Laffan resulted in the outage of approximately 17 percent of Qatar's LNG capacity, with QatarEnergy warning that repairs could take as long as five years.