Asia still major market for Qatar crude

Asia remains Qatar's main LNG customer, constituting 60% of total refined products exported, according to a report

Japan remains Qatar's major LNG importer.
Japan remains Qatar's major LNG importer.

Qatar exported 595,000 barrels per day (bpd) of crude oil and 522,000 bpd of refined petroleum products last year. 

According to a reported released by the US Energy Information Administraation (EIA), Qatar sent all of its crude oil refined product exports to Asian countries in 2014.

Japan received around 60% of Qatar's refined products, according to the EIA. 

Qatar, the world’s second-largest exporter of natural gas (LNG), exported nearly 4.3 Tcf (trillion cubic feet) in 2014.

Last year the country was again the world’s largest LNG exporter, accounting for 32% of global natural gas exports.

While most of Qatar’s exports go to markets in Asia in the form of LNG, the country sends a small amount of natural gas via the Dolphin Pipeline to the UAE and Oman.

Traditionally, most of Qatar’s LNG exports were part of long-term, oil-indexed contracts, but over the past few years the country has started to shift to more short-term contracts and spot-market sales.

In 2012, Qatar exported more than one quarter of its LNG as short-term or spot-market sales, accounting for more than a third of short-term or spot-market sales in the world, The Peninsula reports.

Several recent agreements between Qatargas and international LNG importers are short-term, including a deal based on continental European prices rather than oil-indexation, for the first time in the company’s history, the EIA document noted.

The report added that Qatar has more than 90% of its LNG production volumes committed as part of supply purchase arrangements (SPAs) between 2014 and 2021.

As the population rose, so too has its petroleum consumption, from 82,800 bpd in 2004 to 230,000 bpd in 2013, putting demand on local supply. Qatar has two operating refineries with a combined crude oil refining capacity of 338,700 bpd. However, the combined output is more than enough to meet Qatar’s domestic demand, with a surplus output that enables Qatar to export refined products.

Both refineries are near major oil export terminals, one at Umm Said and the other at Ras Laffan.

There are plans to expand refining capacity at Ras Laffan with a 146,000 bpd condensate splitter by the third quarter of 2016.

Quoting industry journals, EIA said that as of January 2015, Qatar had the third-largest proven reserves of natural gas in the world at 872 Tcf.

However, because of self-imposed moratorium on new projects, Qatar’s natural gas production has plateaued and could begin to decline soon. \

The potential for a near-term increase in natural gas production lies in the 1.4 billion cubic feet (Bcf) per day Barzan project, which was the last project approved before the North Field moratorium.

(The government may very soon find itself under increased pressure to lift the moratorium, which was first announced back in 2005 to conserve the nation’s most valuable resource, but some feel has outlived its purpose, The Edge reported earlier this year.)Scheduled to come online in 2016 and reach maximum production capacity in 2017, Barzan is only expected to offset some of the foreseen production decline.

It is foreseen that the $10.4bn Barzan Gas Project will boost Qatar’s natural gas production from the North Field in the near term.

The project consists of both onshore and offshore developments, including offshore platforms, pipelines, and a natural gas processing unit. Announcements by government officials and ExxonMobil indicate that the project, which began in 2011, will begin operations in 2016 and be capable of processing 1.4 Bcf per day of natural gas.

Qatar’s natural gas production has increased its output of condensates and natural gas plant liquids, which are valuable by-products of natural gas production. Qatar’s condensate production is approximately 700,000 bpd with exports of about 500,000 bpd, making the largest condensate exporter in the world.

The report outlined that Qatar’s rising electricity demand stems mainly from LNG expansion and economic growth. With one of the fastest growing economies in the world, energy demand in Qatar has risen significantly, particularly electricity demand.

All of Qatar’s current generating capacity is natural gas-fired, although there has been discussion on potential solar power projects over the past several years.
Between 2000 and 2012, Qatar’s electricity consumption grew from approximately 8.0bn kilowathours to 32.7bn kilowatthhours.
 

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