QatarEnergy is in reported talks with Woodside Energy to purchase up to three million metric tons of liquefied natural gas (LNG) annually from the Australian company’s Louisiana LNG project under construction, as the Qatari energy giant seeks to secure supplies amid the ongoing Iran war and disruptions to shipping through the Strait of Hormuz.
As per a Reuters report, a potential agreement between the two could cover supplies from the 16.5 million metric tons per annum (mtpa) export facility for between 15 and 20 years.
While the Iran war and the subsequent choking of the Strait of Hormuz have curtailed maritime energy shipping, the conflict has also witnessed QatarEnergy’s infrastructure becoming the geopolitical collateral in front of Tehran’s missile and drone strikes.
In this background, QatarEnergy has been forced to increase its purchases from US LNG exporters to meet some of its customers’ requirements.
A separate set of negotiations is also under way between QatarEnergy and US LNG producer Venture Global, with companies in “advanced talks” for a long-term supply agreement covering at least three million metric tons of LNG annually.
QatarEnergy has expanded its long-term procurement arrangements with American exporters and turned to the US spot market to secure LNG cargoes, seeking additional volumes from facilities along the US Gulf Coast.
On Thursday, Cheniere Energy, the largest US LNG exporter, announced a long-term agreement to supply QatarEnergy with 4 mtpa of LNG from 2031 to 2054.
Under the agreement, 2 mtpa will come from Cheniere’s Sabine Pass facility in Louisiana, while the remaining 2 mtpa will be sourced from its Corpus Christi terminal in Texas.
The Cheniere agreement represents another major supply arrangement between QatarEnergy and a US exporter this year, as the company looks to diversify its sourcing options amid uncertainty over shipping routes.
QatarEnergy holds a 70% stake in the Golden Pass LNG facility currently under development in Louisiana. Once completed, the project will have the capacity to export up to 18 mtpa of LNG.
Woodside’s Louisiana LNG project is designed to export 16.5 mtpa, while Venture Global is developing its CP2 LNG facility in Louisiana.
Venture Global could become the second-largest LNG exporter in the US when production begins at CP2. Both Venture Global and Woodside’s Louisiana LNG project have substantial uncommitted capacity available for potential buyers.
Their available volumes could offer QatarEnergy an opportunity to secure additional US supplies through long-term contracts, complementing its existing procurement arrangements.
However, the commercial terms remain an important consideration in the negotiations.
Louisiana LNG is seeking liquefaction fees exceeding USD 2.50 per million British thermal units (mmBtu), above average US market prices, as per the sources.
The higher fees reflect the project’s contract flexibility, with potential buyers being offered shorter agreements in exchange for higher prices.
For QatarEnergy, the negotiations involve balancing supply security against contract costs and duration as it responds to disruptions in international LNG shipping.