Qatar LNG Sales To Asian Markets Confronted By U.S., UAE Rivalry

Qatar is finding it difficult to agree on new deals to supply liquefied natural gas (LNG) to Japan and South Korea as rising competition from the U.S. and other suppliers with more flexible contract terms challenges Doha's decades-old dominance of the market, according to Andrew Mills, Marwa Rashad, Emily Chow, and Yuka Obayashi, reporting for Reuters.

Qatar was once the top LNG supplier to Japan and South Korea, but buyers are now showing a preference for supplies from the United States, the United Arab Emirates (UAE), and Oman. I Photo: PESA Energy Geoscience

Qatar was once the top LNG supplier to Japan and South Korea, but buyers are now showing a preference for supplies from the United States, the United Arab Emirates (UAE), and Oman.

These suppliers offer shorter-term contracts and, unlike Qatar, do not restrict the cargo's final destination. This provides buyers the flexibility to sell the cargo elsewhere in the future if they no longer need them.

Negotiations between Japanese and South Korean buyers and Qatar have stalled due to Qatar's insistence on destination clauses, sources said.

"The Qataris try to achieve a lot in how they sell their LNG, in terms of retaining control over the market, whereas others, such as the UAE's ADNOC and Oman, are happy to just get a good price," a senior trading source said.