The World’s Biggest LNG Producer Holding Onto it’s Gas

On paper, it should be a perfect match. Qatar has huge amounts of gas to export and its neighbours are desperately prowling for reliable energy supplies to power their emerging economies. But Qatar’s recent decision to rule out significant gas exports to its allies in the Gulf Cooperation Council from a huge gas project inaugurated earlier this month illustrates just how acute the gas needs are among some of the globe’s biggest oil producers.

The new Qatari jewel is the second phase of Al-Khaleej Gas, which is now producing about 1.25 billion cubic feet a day, equivalent to about 17% of the country’s production. Combined with AKG-1, the two projects account for more than a quarter of the country’s overall output. (Most of the remainder is liquefied and exported around the world.)

Qatar’s deputy prime minister and energy minister, Abdullah al-Attiyah, recently said that all of the gas production from AKG-2 would be used to meet domestic demand, especially for electricity generation, and to continue feeding the relentless double-digit economic growth of the past few years.

Qatar is already the world’s biggest LNG producer. It’s also a growing player in gas to liquids. But over the next decades, the country’s domestic gas demand is expected to double. And that increased gas demand can be seen throughout the region as oil rich countries work to grow their economies, especially for petrochemical and industrial sectors, as well as domestic desalination and electricity demand.

Regional electricity demand is expected to increase annually by more than 6% and it is already competing with gas demand from petrochemical plants, with countries like Kuwait forced to prioritize power over industrial output.....Read the entire article.

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