Qatar's decision to add an extra 30% to its existing LNG
capacity by 2024, taking the total up to 100 MMTPA is likely to dramatically
upset the projected demand-supply balance in the global LNG market. This will mean that the supply gap that was initially meant to emerge by 2021,
later postponed to 2024, is likely to be put off by another few years.
Given that there will be excess supplies coming in from the US and Australia as well, Qatar is likely to fight hard to retain and deepen its market share in proximate markets like India where it has a comparative advantage in relation to other suppliers. In likelihood, Qatar is likely to under cut other suppliers to India.
The upshot of all of this is that the new gas to be produced by ONGC RIL-BP tenders contracts will have to stay competitive to the landed price of LNG set essentially by Qatar, essential for the life of these projects. Peak production from these fields will happen at a time when Indian LNG projects prices will be under pressure.
Qatar's new plans will work to hamstring Indian producers, curtailing their pricing power, keeping their margins under stress.
Given that there will be excess supplies coming in from the US and Australia as well, Qatar is likely to fight hard to retain and deepen its market share in proximate markets like India where it has a comparative advantage in relation to other suppliers. In likelihood, Qatar is likely to under cut other suppliers to India.
The upshot of all of this is that the new gas to be produced by ONGC RIL-BP tenders contracts will have to stay competitive to the landed price of LNG set essentially by Qatar, essential for the life of these projects. Peak production from these fields will happen at a time when Indian LNG projects prices will be under pressure.
Qatar's new plans will work to hamstring Indian producers, curtailing their pricing power, keeping their margins under stress.
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