QatarEnergy has signed a 30-year agreement to purchase liquefied natural gas (LNG) from US exporter Cheniere Energy, as the war with Iran disrupts Qatari production and shipping routes.
Under the agreement, QatarEnergy will buy 4 million metric tonnes of LNG annually until 2054. Deliveries are expected to begin in the 2030s from Cheniere's Sabine Pass and Corpus Christi export facilities, with prices linked to the US Henry Hub benchmark plus a fixed fee, says CNBC.
The deal marks a shift for Qatar, previously the world's second-largest LNG exporter, which is turning to a major competitor to help meet its supply commitments while its own export capacity remains constrained.
Although the contracted volume represents less than 1% of global LNG trade, which exceeds 400 million metric tonnes annually, energy analysts consider the agreement one of the largest individual natural gas deals ever signed in the United States.
QatarEnergy is also in advanced talks with independent US supplier Venture Global to purchase an additional 3 million metric tonnes of LNG annually.
Damage to production facilities
Qatar's LNG exports have been severely affected by an Iranian attack on its Ras Laffan production facility eight months ago. The attack disabled two production lines, reducing the country's LNG export capacity by 17%.
Qatari Energy Minister Saad Sherida Al-Kaabi has said repairs to the facility will take about three years.
Qatar has declared force majeure every month since the March attack, citing its inability to fulfil supply contracts.
The damage has compounded the impact of disruptions to shipping through the Strait of Hormuz, a key route for energy exports from the Gulf.
With Iranian strikes on commercial tankers making passage unsafe, Qatar is exporting "very little" gas, according to the information provided.
The long-term US supply agreement also reflects concerns about the future reliability of shipping through the strait, as Qatar seeks to secure alternative sources of gas to meet its international commitments.
Qatar expands LNG trading
QatarEnergy is seeking to expand its global LNG trading business by sourcing supplies from the United States, allowing it to maintain its international commitments despite damage to domestic production facilities and restrictions on maritime transport.
The company has secured a $3 billion loan from Chinese banks to finance the US natural gas purchases.
The strategy would allow QatarEnergy to obtain LNG from external suppliers rather than relying exclusively on its own production, which has been affected by the conflict.
US LNG producers benefit
The conflict has accelerated the shift towards US energy suppliers as international buyers seek alternative sources of LNG and greater security of supply.
Shares in Cheniere Energy and Venture Global have risen 26% and 40%, respectively, since the war began. Wall Street analysts remain strongly bullish on both companies.
The agreements with QatarEnergy could further strengthen the role of US LNG producers in global markets as disruptions to Gulf supplies reshape trade flows and long-term purchasing strategies.