A plan by top global liquefied natural gas (LNG) exporter Qatar to ramp up output will stall the expected growth of U.S. LNG exports, Woodside Petroleum chief executive Peter Coleman said.
Qatar surprised rivals this month when it lifted a self-imposed ban on development of the North Field, the world’s biggest natural gas field, saying it would boost LNG output by 30 percent to 100 million tonnes a year in five to seven years.
That put it on course to it wrest back the title of the world’s top LNG exporter from Australia, which is set to overtake Qatar in the next two years.
Woodside, operator of the North West Shelf project, said Qatar’s plan showed the emirate shares its outlook for solid demand growth for LNG and gives importers like China, India, Pakistan and Bangladesh the supply certainty they need to lock in gas expansion plans.
“The Qataris will not take up all of the available market,” Mr Coleman said on Thursday.
Qatar’s expansion plan will compete directly with Woodside, which is looking to develop the Browse and Scarborough fields off Western Australia within the next decade – its so-called Horizon 2 projects – by processing gas through the North West Shelf plant or other existing facilities.
“On the challenge side, low cost will get into market, and that’s what we’re doing with our Horizon 2 projects. We’re trying to make sure they’re low cost, and they’re well positioned, because we’re targeting the Asian market,” Coleman said.
Projects that will find it harder to compete will be those that need billions of dollars in new infrastructure and coal seam gas-to-LNG projects that need continuous capital spending to drill new wells, he said.