As U.S. and Middle East LNG exporters appear poised to be the dominant long-term players in the global market, competition for Asian buyers willing to pay for the next wave of supply could be heating up.
Global liquefied natural gas exports are forecast to more than double to 805 million metric tons/year (mmty) by 2050, according to the Gas Exporting Countries Forum. Under GECF’s forecast, LNG would represent around 64% of all natural gas traded by the middle of the century.
Nearly 55% of global LNG export capacity in 2050 is expected to be in the Middle East or North America. But, as Middle East countries push massive investments to develop gas reserves, developers in the region may already be gaining traction with Asian markets.
“LNG from the Middle East, which will come from low-cost producers, is well suited to the high volume demand growth of price sensitive buyers in South and Southeast Asia, and we have already seen aggressive marketing by Qatar and the UAE to these countries – particularly to India,” Rystad Energy analyst Wei Xiong told NGI.
For several decades, the Middle East has supplied around 35-40% of the world’s oil. However, as the outlook for oil demand shrinks under the global energy transition, some of the region’s largest producers have switched focus to lower-carbon natural gas.
The Middle East is estimated to add around 130 mmty of liquefaction capacity by 2050, primarily led by Qatar’s North Field expansion plans.
Big Investments
Up to $120 billion dollars of investment in the Middle East is estimated to increase gas production by 14 Bcf/d to 86 Bcf/d by 2030. About half of the increase would be made available for export, according to Wood Mackenzie.
Algeria, Qatar, Saudi Arabia and the United Arab Emirates (UAE) are also building LNG portfolios outside the region by acquiring stakes in global upstream assets and liquefaction and regasification capacity projects.
“LNG expansion in the Middle East is mostly driven by Qatar and the UAE, and within those countries, more by a strategic view on the importance of LNG and the growth of the market, rather than by more domestic discoveries, “ Qamar Energy CEO Robin Mills explained.
In June, state-owned Saudi Arabian Oil Co., better known as Aramco, confirmed it’s working to take a 25% equity stake and 5 mmty in offtake from the second phase of Sempra Infrastructure’s Port Arthur LNG project in Texas. Liquefaction capacity in the United States is poised to jump from current levels of 94 mmty to 173 mmty by the end of the decade.
Based on Kpler data, Algeria, Oman, Qatar and the UAE exported around 110 mmty of LNG last year, more than 25% of the total 413 Mt of global LNG exports in 2023.
Qatar is the dominant player in global LNG, Mills said. Its market share will increase with the North Field project’s new trains. Reserves in the western part of Qatar’s North Field are estimated around 240 Tcf, increasing Qatar’s estimated gas reserves to more than 2,000 Tcf.
Qatar Energy (QE) has targeted LNG production capacity to reach 142 mmty by 2029-2030. It disclosed a third expansion plan earlier in the year, called North Field West, that would follow the 32 mmty North Field East (NFE) expansion in 2026-2027 and the 16 mmty North Field South (NFS) expansion in 2027-2028.
Qatar exported nearly 65 mmty of its total 80 mmty of production last year to Asia, with China and India taking 26 mmty, and the remaining 15 mmty of exports delivered to Europe.
Much smaller than Qatar’s massive LNG expansion plans, LNG expansion in the UAE is based on the development of known gas reserves, including the Hail and Ghasha offshore development project. The Abu Dhabi National Oil Co. (Adnoc) reached a final investment decision (FID) on an offshore project last year, which is expected to produce more than 1.5 Bcf/d of gas by 2030.
The UAE exported nearly 5.5 mt last year and plans to add 900,000 tons by debottlenecking Adnoc’s 5.6 mmty facility on Das Island in Abu Dhabi. A second Adnoc project, the 9.6 mmty Ruwais LNG, reached FID in June and is slated for start-up in 2028. It would more than double the UAE’s existing LNG production capacity.
BP plc, which is leading development of Oman’s 1.5 billion Bcf/d Khazzan gas project, is aiming to meet around 30% of Oman’s domestic gas demand. That could support the country’s plans to free up additional volumes for export. Oman has plans to add a 3.7 mmty fourth train to its 10.4 mmty Qalhat LNG facility.
Oman exported 11.5 Mt last year, based on Kpler data, with nearly 90% of exports delivered to Asia. The majority of cargoes were delivered to South Korea and Japan. The remaining volumes went to Europe.
Upstream Development Needed
Egypt and Algeria are both struggling for upstream gas, with a relative lack of recent large discoveries and/or developments, Mills told NGI. The two countries are struggling to increase LNG exports for different reasons.
Sonatrach’s 20.8 mmty Arzew and 4.5 mmty Skida liquefaction facilities are said to be operating at less than 60% of capacity.
Despite production and capacity issues, Algeria remains committed to exports of the super-chilled fuel, especially to Europe. Sonatrach agreed to supply additional volumes following Russia’s invasion of Ukraine.
Algeria sells a few cargoes annually to Asia, but is the only Middle East country where the majority of its LNG production is delivered to Europe.
Algeria significantly contributed to LNG supply growth in 2023 ,the International Group of Liquefied Natural Gas Importers wrote in its 2024 annual report.
LNG exports from Algeria jumped by 3 mmty last year from 10.16 mmty in 2022 thanks to the start-up of three new upstream projects.
Egypt’s plans to become a regional gas hub and LNG exporter are on hold as dwindling domestic gas production and increased power demand, especially during the hot summers has left the country short of gas.
State-owned Egyptian Natural Gas Holding Co. (EGAS) exported its last LNG cargo in April, and has sought to buy 17 cargoes for July to September delivery.
Gas production in Egypt could rise again, reaching 80 billion cubic meters by 2030. A two-year project with EGAS and partners, according to GECF, will develop 30 exploration wells in the Mediterranean Sea and the Nile Delta with the aim of meeting both future domestic gas demand and LNG exports.
