QatarEnergy negotiating with Woodside and Venture Global to buy U.S. LNG

QatarEnergy is in talks to buy up to 3 million tonnes per year of liquefied natural gas from Woodside Energy’s Louisiana LNG project in the United States, according to three people familiar with the negotiations, in the second such set of talks to emerge in two days after the company announced advanced talks with U.S. firm Venture Global to buy at least 3 million tonnes per year.

Woodside deal could run up to 20 years

According to the sources, any potential agreement with Woodside could run between 15 and 20 years, with volumes to be supplied from the Louisiana LNG facility, which is still under construction and has export capacity of 16.5 million tonnes per year. The two companies have not officially announced the talks.

Venture Global in advanced talks

Separately, QatarEnergy is negotiating a long-term agreement with Venture Global to buy at least 3 million tonnes per year, after purchasing spot-market cargoes from the company in recent months to meet obligations to some of its customers. Venture Global is the U.S. supplier with the largest amount of uncontracted production capacity. The timing and duration of any potential deal have not been disclosed, and neither company commented on the talks.

Two days after Cheniere deal

These talks come after QatarEnergy on Thursday, Oct. 22 signed two agreements with U.S. company Cheniere to buy up to 4 million tonnes per year from the Sabine Pass facility in Louisiana and the Corpus Christi facility in Texas, with supplies to start in 2031 and run until 2054. If the two new deals are completed, the volumes Doha is seeking to buy from the United States could exceed 10 million tonnes per year.

Why Qatar is buying gas

The moves follow a strike that hit the Ras Laffan industrial city in March, which caused severe damage to two production trains and put about 17 percent of Qatar’s export capacity out of service. Minister of State for Energy Saad Sherida al-Kaabi said repairs will take about three years. Since then, QatarEnergy has declared force majeure monthly amid severe navigation restrictions in the Strait of Hormuz that allow only a very limited number of Qatari LNG tankers to transit.

Impact on the Qatari economy

The effect showed up in the IMF’s regional report released on Oct. 22, which forecast a 15.6 percent contraction in the Qatari economy this year, saying Qatar’s output fell at the peak of the crisis by up to 86 percent and that the recovery of Gulf economies depends on an end to hostilities and the gradual return of navigation in the Strait of Hormuz.

Reading the shift

The string of deals shows Doha is no longer treating the Hormuz disruption as a temporary disturbance but is building an alternative supply portfolio spanning decades to enable it to meet contracts with buyers in Asia and Europe and preserve market share until Ras Laffan is repaired. At the same time, those contracts strengthen the position of U.S. exporters, who have become the main beneficiaries of disrupted Gulf supplies.

Read also: QatarEnergy signs two agreements to buy 4 million tonnes a year of U.S. LNG through 2054