A growing number of buyers and importers seeking to secure liquefied natural gas have turned to the United States on Thursday after the latest attack on Qatar’s massive LNG complex further disrupted global fuel supplies, Bloomberg reports.
Companies in need of fuel have begun approaching U.S. producers directly.
This involves reserving volumes both from existing American plants and from projects that are still under construction. Negotiations are at an early stage, as agreeing on the terms of long-term LNG contracts traditionally takes considerable time, sources say.
The United States is already the world’s largest LNG exporter and plans further large-scale expansion. A number of new gas liquefaction plants are in the design or construction phase. Shares of several U.S. LNG producers reacted to the news with solid gains.
The war in Iran and the shutdown of the Qatari complex triggered a surge in gas prices in Europe and Asia. At the same time, prices in the U.S. rose only slightly: existing American LNG terminals are already operating at near full capacity, while domestic shale gas production remains abundant. U.S. plants physically cannot export more than they currently do to immediately meet global demand.
Iran carried out a direct strike on the Ras Laffan complex—the largest LNG facility in the world. Repairs and restoration of capacity could take up to five years. The emirate’s expected financial losses are estimated at around $20 billion in lost revenue annually.
For the global market, this means that a huge volume of supply has been removed from the balance for years, and the only reliable alternative capable of covering this deficit in the medium term will be new U.S. projects.
