As US and Australian exports rise, all eyes are on the reaction from Qatar, now the world's biggest, and lowest-cost, LNG producer. Attention to date has focused largely on strategy in the long-term market, where buyers are demanding more contract flexibility. A more immediate question is how Qatar will manage its role as the world's swing LNG supplier in the short-term market, particularly amid concerns about a race to the bottom on price. Qatargas and RasGas traditionally sell nearly three-quarters of their combined 77 million ton per year output on long-term oil-indexed contracts, charging a premium for reliability. That leaves roughly 20 million tons/yr of flexible volumes to be sold wherever margins are best The Mideast producer's location allows it to send cargoes both east and west, but the rampup of flexible US exports will create more competition in the Atlantic Basin spot market at the same time uncontracted volumes from new Australian projects like Gorgon and Wheatstone increase the number of spot cargoes available in Asia. The Middle East will be another battleground.
展开▼
