QatarEnergy’s Kaabi says US LNG deals hedge Hormuz risk

QatarEnergy is signing long-term contracts for liquefied natural gas from the United States and other producers. The aim is a trading hedge that would bring in revenue if exports through the Strait of Hormuz are cut off again, CEO Saad Sherida Al-Kaabi told Reuters Thomson Reuters Corporation ↗ 3.08% on Thursday in an exclusive interview. "In a scenario where you have a closure of the strait, which is the true contingency that we're looking to have, you'd immediately see a spike in gas price and you'll be able to generate revenue for QatarEnergy that otherwise wouldn't be generated," said Kaabi, who is also Qatar's minister of state for energy affairs.reuters.com

Qatar supplies about a fifth of the world's LNG exports, and all of it passes through Hormuz. Kaabi's comments are the first explanation of how the state company plans to make up for income lost during the Iran war.reuters.com

Seven million tons and counting

On October 29, QatarEnergy signed a 20-year deal to buy 3 million tons per annum (mtpa) from Woodside's ↘ 4.03% Louisiana LNG project. Deliveries are expected to start in 2030. That came a week after two agreements with Cheniere Energy ↘ 5.66% for 4 mtpa from Sabine Pass and Corpus Christi through 2054. Those contracts are priced off Henry Hub plus a fixed fee, and 1 mtpa depends on a final investment decision for an expansion. With the Woodside volumes, QatarEnergy says it is now the largest buyer of US LNG.lngir.cheniere.com+2

"There's more to come," Kaabi said. He added that the company's target is "much higher" than 7 mtpa but did not give a figure. QatarEnergy is in talks with "everybody," including Venture Global ↘ 11.76%, and will choose whoever offers the best terms. Reuters had reported earlier that Venture Global was in advanced talks to supply 3 mtpa.reuters.com

Arbitrage over pipelines

Kaabi said the idea was his own and took shape about three months ago, after the company looked at pipelines and ruled them out. "As we have seen, pipelines and pump stations or compression stations can be also targets," he said. The plan needs no capital spending. It relies on QatarEnergy's fleet of about 200 tankers and its trading arm to profit from the gap between US and European gas prices. The US volumes cannot serve as backup supply for long-term customers, because those contracts specify fixed export terminals and destinations.au.investing.com+1

War damage and recovery

QatarEnergy stopped LNG production in early March after Iranian missile attacks and has extended force majeure to the end of 2026. Strikes on Ras Laffan damaged two of its 14 trains, taking out about 17% of export capacity. Kaabi said repairs will take about three years. He expects the Pearl gas-to-liquids plant, a joint venture with Shell ↘ 3.33%, to return by the first quarter of 2027. Qatar could restart production within a week of a peace deal, though at about 83% of pre-war levels until the damaged trains come back. Its plan to expand capacity to 142 mtpa has not changed.reuters.com