In amending the Sherman Act in June 2018 US Representatives may have inadvertently given a boost to Qatar’s LNG ambitions, including consolidating its hold on the lucrative US LNG market.
The proposed amendments to the Sherman Act – which is currently sitting with the Senate Judiciary Committee – are designed to make oil producing and exporting cartels illegal. The bill’s short title is “No Oil Producing and Exporting Cartels Act or NOPEC.”
Here is how that relates to Qatar and its LNG ambitions.
In November last year, the threat of the legislation was cited as one of the reasons that led to Qatar quitting OPEC. Qatar’s Minister of Energy and the vice chairman of Qatar Petroleum Saad Sherida Al-Kaabi told Reuters that NOPEC opening up OPEC to anti-trust lawsuits as among the reasons for Qatar leaving the cartel and ramping up its LNG ambitions. This is especially seen in the United States, where your editor resides.
Qatar Petroleum and ExxonMobil are close to announcing the go-ahead for a US$10Bn expansion project for Golden Pass LNG, which operates an LNG import terminal in Sabine Pass, Texas. The facility upgrade would include three liquefaction trains that would have the capacity to export 15.6 mta. It could open as early as 2022, pending final investment decisions. Qatar Petroleum controls a 70% stake in Golden Pass, ExxonMobil, 17.6% and ConocoPhillips (12.4%).
The US is an LNG export juggernaut. The country’s LNG export capacity is expected to more than double by the end of 2019, according to the US Energy Information Administration. New LNG export capacity is expected to be added at Corpus Christi and Freeport, Texas, as well as Cameron and Sabine Pass, Louisiana. The Elba Island LNG facility near Savannah, Georgia, is also scheduled to become fully operational by the end of 2019.
EIA projects that US LNG export capacity will reach 8.9Bn ft3 per day by the end of 2019, making it the third largest in the world behind Australia and Qatar.
With LNG demand expected to more than double to 550 mta by 2030, the investment in Golden Pass can be seen as part of Qatar’s plan to drive the future energy picture. If further evidence of Qatar’s vaulting LNG ambitions were needed consider Qatar Petroleum has unveiled plans to build up to 60 new LNG carriers. Who would have thought a piece of American legislation would have been seen as the green light?