Qatar’s LNG deal with JERA is a strategic win for the small Gulf nation that will help ensure it keeps pace with its biggest competitor, the United States.
Qatar retains key advantages over the U.S. and other producers around the world, including lower production costs and closer proximity to Asia, the world's largest and fastest-growing LNG market.
However, the Gulf country saw its exports to Japan slip from a peak of 16.7 million tons in 2013 to roughly 3 million tons in recent years as Japanese demand softened and competition from other exporters grew.
This new deal - which will double the country’s LNG shipments to Japan - follows a string of big-ticket wins for Qatar. It has signed agreements to supply countries including China, which is the world's largest LNG importer, Malaysia and France. These deals underpin Qatar’s three huge expansion projects that are expected to increase the country’s LNG export capacity from 77 mtpa today to 110 mtpa later this year and 142 million tons by 2030.
This blistering growth should help Qatar narrow its production gap with the U.S., which seized the crown as the world’s top LNG exporter in 2023 and is expected to push capacity beyond 200 million tons a year by 2030.
On the other hand, Japan’s energy vulnerability is structural. The world’s fourth-largest economy has spent decades reliant on imported fossil fuels, with no pipeline gas options and few domestic resources.
At the start of the decade, the world's second-largest LNG importer was determined to shrink its dependence on expensive gas and other fossil fuel imports.
So what explains Japan’s abrupt U-turn on LNG?
