(The Center Square) - Louisiana-produced liquified natural gas is serving as a buffer for stressed global gas markets as the Middle East conflict chokes off traditional supply routes.
Drone strikes and Iran’s blockade of Persian Gulf prompted state-owned Qatar Energy to buy natural gas from one of its main American competitors, Venture Global, to fulfill long-term contracts with Asian customers, according to a report by Reuters.
When Iranian drone and missile strikes severely damaged Qatar’s Ras Laffan energy complex and choked off the Strait of Hormuz. In March, QatarEnergy invoked “force majeure” clauses in the contracts, meaning it was legally excused from delivering any gas to its customers.
By spending approximately $1 billion out of pocket to buy the Louisiana spot LNG, Qatar shielded its customers from shortages and prevented them from permanently taking their business to American competitors, according to the Reuters report.
The cargoes Qatar bought from American LNG suppliers were for delivery to Japan, South Korea, India, Bangladesh, and Taiwan, according to Reuters’ sources.
Kapler shipping data confirms that 28 of the 33 LNG spot cargoes purchased by Qatar Energy this year to supply its Asian customers were loaded at Louisiana export facilities.
According to U.S. Department of Energy data, about 20% of global LNG shipments sailed through the Strait of Hormuz in recent years. Typically, about 80% to 90% of this LNG, produced mostly by Qatar, flows to the Asian market.
Separately, Reuters today reported that a Qatar Energy-owned LNG tanker, the Al Areesh, successfully exited the Strait of Hormuz bound for Port Qasim, Pakistan. Pakistan, a primary mediator in the U.S.-Iran conflict, secured the LNG tanker’s passage in discussions with Tehran in an effort to ease severe domestic fuel shortages. It was the first Qatari LNG vessel permitted by Iran to transit the 22-mile-wide Strait of Hormuz in more than three weeks.
Originally published on thecentersquare.com, part of the BLOX Digital Content Exchange.
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