LNG Buyers Hunt For Deals In US After Qatar Supply Shuts Due To Iran War

Asian and European buyers of liquefied natural gas are chasing the limited number of cargoes still available from US suppliers after the world's largest LNG plant in Qatar was shut out of the market by the war in Iran.

Importers from Japan and Germany are among those in discussions with US LNG companies to buy more of the fuel, particularly for short-term delivery, according to people familiar with the situation who asked not to be because the information is private.

The early-stage talks, happening during the CERAWeek by S&P Global conference in Houston, highlight how the attacks on the Ras Laffan plant that knocked about a fifth of global supply offline have stretched worldwide LNG supplies like never before.

That presents US LNG producers who were already well positioned with a chance to take some long-term market share from their biggest rival: Qatar.

Photo Credit: Bloomberg

Yet there isn't much spare US LNG to go around. The majority of producers on the Gulf Coast are running their plants at near capacity, and much of their supply is already under long-term contract.

"The incremental LNG supply in a very constrained market is going to be bid up between Asia and Europe," said Balaji Krishnamurthy, Chevron's Australia upstream chief during a panel Tuesday.

The US is the world's largest LNG exporter, producing more than 116 million metric tons a year in 2025, according to data compiled by Bloomberg.

Qatar was the third-largest exporter before the start of the war. The United Arab Emirates also produces about 4.5 million tons a year.

With the effective closure of the Strait of Hormuz, much of the Mideast LNG supply is now cutoff from the market. And because buyers can only hold a limited amount of the fuel, importing countries such as Japan depend on a steady stream of delivered cargoes.

Japan holds just 21 days' worth of gas inventories, compared with 250 days of oil stockpiled, said Takehiko Matsuo, vice minister for Japan's ministry of economy, trade and industry known as METI, during a panel.

US LNG exporters Cheniere Energy Inc., Venture Global Inc. and Woodside Energy all said they were producing at max capacity as the world scrambles to secure supplies, adding that all options were on the table to try to pump out more LNG.

Cheniere Chief Executive Officer Jack Fusco said the company was reviewing its maintenance schedule to determine if it could load more cargoes from its two facilities in Texas and Louisiana.

Some companies including Venture Global are starting up export plants and can commission cargoes, meaning they can produce supplies before a long-term contract starts.

Venture Global's Plaquemines facility in Louisiana is due to start producing cargoes under contract later this year, while generating excess cargoes from its Calcasieu Pass plant.

Cheniere is ramping up its next phase of an expansion at its complex in Corpus Christi and is expected to start the fifth train of the Stage 3 phase this week.

Though US exporters can't completely fill the supply chasm, the spot sales stand to be a boon for further expansion.

"There is clearly going to be be a re-pricing of the risk premium in the Middle East, which I believe will favor US providers," said Ben Dell, managing partner of Kimmeridge Energy, which is developing the proposed Commonwealth LNG project in Louisiana.

While the talks at CERAWeek are happening with more-established Asian and European buyers, the Qatar outage is expected to have the most severe near-term impact on buyers in emerging southeast Asian markets such as Bangladesh and India.

Spot LNG prices have nearly doubled since the start of the war, placing further strain on buyers.

"Unfortunately at these high prices, the emerging markets are the ones that are going to suffer because the rich countries will pay whatever they have to pay," Fusco said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)