Qatargas sees LNG supply tightening, but could boost output at "short notice"
By NJ Watson
The world could face LNG shortages in the next five years because low gas prices are preventing new projects from making progress, Qatargas chief executive Faisal Al-Suwaidi said yesterday.
But as soon as Qatar lifts its moratorium on new gas developments – which is expected to occur in 2014 – Qatargas would be able to supply the market with an additional 12m tonnes a year (t/y) at "very short notice", he told reporters after his keynote speech at the WGC.
Qatar's production is set to reach a peak of 77m t/y in 2011, as a series of large LNG trains come on stream. However, once the country lifts its moratorium, Qatargas can start a programme of de-bottlenecking that should add an extra 2m t/y of production to each of its six mega-trains.
"I am confident that those mega-trains will be able to give us at least an additional 2m t/y [of output] each," Al-Suwaidi said. "With our experience gained operating two mega-trains, an extra 2m t/y from each train is certainly achievable. We could add an extra 12m t/y".
That extra production would help ameliorate an LNG supply crunch caused by producers being unable to secure the financing they need to get new liquefaction projects off the ground.
Said Al-Suwaidi: "Fewer greenfield and brownfield projects are advancing these days, as all investors and financers are cautious about their ability to provide project financing, while commodity pricing is relatively weak and costs still reflect the overheated construction market of the last few years."
This could lead to supply tightness by 2015, he said – given that it typically takes up to five years to develop a new LNG project. "The market for LNG could become very tight again," he said.