Qatar, the top exporter of liquefied natural gas (LNG), expects a glut of the fuel to end in three years, putting it at odds with the energy watchdog to major consumers which says the oversupply could last a decade.
Qatar Oil Minister Abdulla Al Attiyah said the Gulf producer is on track to reach a targeted capacity of 77 million tonnes per year (tpy) by December 30.
The new capacity comes online as the world struggles to absorb new supplies with many economies still in recovery mode, while the International Energy Agency (IEA) had said spare capacity could hit 200 billion cubic metres a year (bcm) in 2015 from around 60 bcm now.
“We are at the end of completion of the last two LNG trains,” Attiyah said on the sidelines of the Singapore Energy Summit.
Gas prices slumped worldwide in late 2008, as recession damped industrial fuel consumption in Europe and new technology slashed production costs for alternative supplies in North America, just as new LNG plants built to supply the US neared completion. Demand in Asia rose sharply in early 2010 and the IEA also expects global consumption to rise by up to 2 per cent this year, after falling by an estimated 3 per cent in 2009, offering some relief to gas sellers.
“Today we are seeing some glut in the market, but I’m confident that in more than three years, we will see the gas balance again,” Attiyah said.
Strong demand growth in India and China could absorb most of the production, he said.
Royal Dutch Shell is also confident about demand. “If you look at the potential demand from China and India it’s huge, China could treble LNG demand from 2010 to 2020, and double it again by 2030,” said Malcolm Brinded, executive director at Shell Upstream International told Reuters.
This was underscored by Nobuo Tanaka, executive director of the IEA, adviser to 28 industrialised economies on energy policy, who told reporters at the conference: “If we assume the current level, the gas glut may go on for as long as 10 years, but there is uncertainty about how strong demand will be from China, so it could be much shorter.”
