Qatar LNG Output Falls Despite Surging Demand Amid Energy Crisis

(Bloomberg) --

Qatar's liquefied natural gas production dropped this year, despite requests from European countries hungry for bigger deliveries to replace Russian fuel.

European utilities are scrambling to secure the commodity from producers around the world to reduce dependence on their top supplier after the invasion of Ukraine. The drop in output is partly due to several liquefaction trains being unavailable due to scheduled maintenance.

The Persian Gulf country exported less than 35 million tons of LNG between January and May, down from 36 million tons a year earlier, according to ship-tracking data compiled by Bloomberg. Qatar Energy didn't respond to a request for comment.

European nations have tried to tap Qatar for more LNG and the US has attempted to lobby Doha on their behalf. Germany's Economy Minister Robert Habeck visited Qatar in March and received the emir, Sheikh Tamim bin Hamad Al Thani, in Berlin last month, but such efforts yielded modest results.

Qatar has said it won't be able to increase output until its expansion project, currently under construction, starts up. It refuses to sully its reputation as a reliable supplier by diverting cargoes already contracted to Asian buyers to Europe. Its liquefaction plants have a rated capacity of 77 million tons per year, but the country exported almost 84 million tons in 2021.

But while Qatar isn't exporting more LNG this year, it's generating more income from sales. Most of its long-term contracts are linked to oil prices, which were about 60% higher in the first five months of 2022, compared with a year earlier.

Benchmark European gas prices are about five times higher, which has also helped make one of the world's wealthiest countries even richer. Qatar was the world's biggest LNG producer last year, but Australia and the US exported more in May, according to data collected by Bloomberg.

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