Editorial comment
As the days get colder here in the UK, the World Cup could not have come at a more perfect time, giving everyone something to get excited about, and help get through the last few weeks of the year. Qatar may not be the most dominant football team; they started their World Cup with a 2-0 loss against Ecuador, making them the first ever host nation to lose their opening game in the tournament.1 However, the same cannot be said about their presence in the LNG industry.
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One of the most exciting projects to make headway this year is the North Field expansion projects, comprised of both the North Field South (NFS) and North Field East (NFE) expansion projects.2 This will be the industry’s largest LNG project ever, adding more than 48 million tpy to the world’s LNG supplies, as well as raising Qatar’s LNG production capacity to 126 million tpy.2 QatarEnergy will hold 75% interest in the NFS project, and has selected TotalEnergies, Shell, and ConocoPhillips as partners for the remaining 25%.2,3,4.
Additionally, QatarEnergy have also entered into a 27-year sale and purchase agreement (SPA) with Sinopec for the supply of 4 million tpy of LNG to China.5 The SPA dictates that the contracted LNG volumes will be supplied from QatarEnergy’s NFE expansion project to Sinopec’s receiving terminals in China. This is the first long-term LNG offtake agreement from the NFE expansion project, and shows a positive outlook for future agreements from this project.
Despite Qatar’s strong contributions to the LNG industry throughout 2022, the US became the world’s largest exporter of LNG in 1H22, according to GlobalData.6 The US’ LNG export capacity expanded by 1.9 billion ft3/d since November 2021, due to increased production capacity at both Sabine Pass and Corpus Christi LNG facilities.6 Additionally, the US is expected to dominate global LNG liquefaction capacity additions, contributing 57% of the total LNG liquefaction capacity additions between 2022 – 2026, according to GlobalData.7
One event that the US did not foresee, though, was the Freeport LNG outage that occurred in 2H22. The terminal accounts for approximately 20% of LNG processing done by the US,6 meaning an outage of this proportion would have a significant impact on the country’s LNG export capacity.
It is clear this year has been one of unprecedented change for the LNG industry with the world reacting to the Russian invasion of Ukraine, as well as changing circumstances in their own countries. The December issue of LNG Industry includes articles that highlight the changing nature of the industry. Starting on p.10, Fitch Solutions’ article provides an outlook for the global LNG market, highlighting the changing import and export dynamics, and Lloyd’s Register’s article looks forward into the future of the industry, arguing that ship supply constraints could prove a major obstacle to the LNG sector’s development later this decade (starting on p.38).
As we bring 2022 to a close and look ahead to the new year, LNG Industry thanks all our readers for their support throughout the year. We wish you all a happy holiday season, and we look forward to seeing you again in 2023!
- References
- HAFEZ, S., ‘World Cup 2022: Qatar beaten by Ecuador as dream turns into nightmare,’ BBC Sport, (20 November 2022).
- ‘QatarEnergy Selects ConocoPhillips As A Partner in the NFS Expansion Project,’ QatarEnergy, (30 October 2022).
- ‘Shell selected as partner in the North Field South LNG project,’ Shell, (23 October 2022).
- ‘QatarEnergy Announces Partnership with TotalEnergies in the North Field South Expansion Project,’ QatarEnergy, (24 September 2022).
- ‘QatarEnergy and Sinopec Sign a 27-year 4 Million Tons Per Annum LNG Supply Agreement To China,’ QatarEnergy, (21 November 2022).
- ‘The US Becomes World’s Largest Exporter of LNG,’ GlobalData, (July 2022).
- ‘US continues to spearhead global LNG liquefaction capacity additions through 2026,’ GlobalData, (3 June 2022).
