The U.S., as a major supplier of liquefied natural gas (LNG), is filling the gap caused by reduced gas exports from Qatar. The war between the United States and Iran has disrupted LNG supplies from Qatar, and now importing companies in South Korea are achieving significant profits by increasing imports of cheaper LNG from the U.S.
Decrease in Qatar's LNG Exports and Negotiations with the U.S.
According to energy industry information, QatarEnergy, the LNG supplier of Qatar, is negotiating to secure 2 to 3 million tons of LNG annually from the U.S. Qatar, which accounts for about 80 percent of the Middle East's LNG export volume, has turned to importing LNG from the United States due to issues arising from the war with Iran and damage to its LNG production facilities. It is estimated that war-related damages have affected Qatar's LNG production by 12.8 million tons or 17 percent of the country's total capacity.
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Impact on the Market and South Korean Imports
From March to last month, Qatar's LNG exports decreased by 96 percent compared to last year, with exports to Asia through the Strait of Hormuz reaching 4.45 million tons. Meanwhile, the United States has been able to compensate for the shortages caused by the decrease in Qatar's exports with a 23 percent increase in LNG exports in the first half of this year. During this period, LNG exports to Asia reached a record 10.9 million tons in the second quarter.
South Korea has also reduced its LNG imports from Qatar and instead turned to purchasing from the United States. From January to August, the share of LNG imports from various countries included Australia (28.3 percent), Malaysia (17 percent), the United States (15.1 percent), and Qatar (5.8 percent). Qatar's share has decreased by 9.8 percent compared to last year.
Power generation companies in Korea that directly import LNG are taking advantage of lower prices for American LNG. The cost of importing one ton of LNG from Qatar in 2024 has reached $745, from Australia $628, from Malaysia $552, and from the United States $549. With these changes, companies can leverage the electricity market more effectively and set higher prices for electricity sales.
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