Oman's Minister of Energy and Mines, Salim Al Aufi, pointed out the necessity for diversification in liquefied natural gas (LNG) export routes in the Middle East at the Gastech conference in Thailand. He emphasized that these routes should be designed to bypass the Strait of Hormuz.
Status of LNG Exports from the Persian Gulf
LNG exports from the Persian Gulf have significantly decreased since the onset of the war between the United States and Israel and Iran. Salim Al Aufi stated, "Let's identify alternative export options, whether to the north, through Oman or Yemen. Diversifying options for transporting resources from this region is essential."
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Need for New Infrastructure
Developing these new routes requires the construction of new pipelines, which takes time and immediately turns them into new targets for aerial and missile attacks. This issue is particularly significant given the recent attacks from Yemen on Saudi Arabia's east-west pipeline.
Oman alone produces over 11 million tons of liquefied natural gas annually. Reports indicate that this country has reached its maximum capacity this year due to reduced supply from Qatar, the largest producer in the region. According to a report from MEES in mid-July, Oman has been producing LNG at a rate exceeding the nominal capacity of its three units, which is 11.4 million tons per year.
Forecast for LNG Prices
Meanwhile, the head of Chevron's operations in Australia has predicted that liquefied natural gas prices will remain high for a longer period. Balaji Krishnamurthy stated, "I find it hard to see prices decreasing" and expects prices to remain high for at least the next six months.
Previous reports indicate that Qatar Energy is seeking LNG contracts with American producers to compensate for its domestic supply shortage due to damages from Iranian attacks. The company is looking for long-term contracts until 2031, indicating that resuming operations at Ras Laffan may take time and likely contribute to a longer period of high LNG prices.
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