Qatar Considers Expanding 37 Trillion Won LNG Construction Plan

[Image source=Yonhap News]

[Asia Economy Reporter Park Byung-hee] Qatar, the world's largest liquefied natural gas (LNG) exporter, is reportedly considering expanding its LNG plant construction plans that began last year, according to Bloomberg citing sources on the 20th (local time). This is due to the surge in demand in Europe, which is seeking alternative gas suppliers to replace Russia.

Last year, Qatar started a large-scale construction project to build six LNG plants with an investment of $30 billion (approximately 37 trillion KRW). According to an anonymous source, the Qatari government is currently evaluating the costs and potential profits from additional construction if more than one LNG plant is built.

As this is still in the early review stage, Qatar may stick to its original plan of building six plants. With the construction of six new plants alone, Qatar's annual LNG production capacity will increase by 60%, reaching 130 million tons by 2027. Each of the six plants can produce 8 million tons of LNG annually. LNG produced from the new plants is expected to be sold on the market after 2025.

This project represents the largest scale ever in the LNG market.

When Qatar announced this plan in 2019, there was much skepticism that LNG demand would soon sharply decline amid the global transition from fossil fuels to eco-friendly energy. In 2020, the COVID-19 pandemic caused a global economic downturn, leading to a sharp drop in demand and gas prices falling to historic lows.

However, since last year, the deterioration of relations between Russia and Europe and the growing instability of Europe's gas supply have reversed the situation. Currently, natural gas prices have soared to record highs.

Last month, Qatar signed a long-term energy agreement with Germany. The United States also pledged last month to supply 50 billion cubic meters of LNG annually until 2030. Last year, the U.S. supplied about 25.8 billion cubic meters of LNG.

Morgan Stanley predicted that global LNG consumption could increase by 60% by 2030 as Europe seeks alternative gas suppliers to replace Russia.

This content was produced with the assistance of AI translation services.