Qatar sees global gas glut ending in 3 years

Qatar, the world's largest exporter of liquefied natural gas, is on track to reach a capacity of 77 million tonnes per year (tpy) by Dec. 30 and expects the global gas glut to end in three years.

"We are at the end of completion of the last two LNG trains," Qatar Oil Minister Abdulla Al Attiyah said on the sidelines of the Singapore Energy Summit on Monday, adding that the two units, known as trains, would be inaugurated on Dec. 30.

They are coming online as the world struggles to absorb fresh supplies with many economies still in recovery mode.

Gas prices slumped around the world in late 2008, as recession dampened industrial fuel consumption in Europe and new technology slashed production costs for alternative supplies in North America, just as new liquefied natural gas (LNG) plants built to supply the United States were nearing completion.

But with demand in Asia rising sharply in early 2010 and the International Energy Agency (IEA) expecting global consumption to rise by up to 2 percent this year, after falling by an estimated 3 percent last year, the worst could be over for gas sellers.

"Today we are seeing some glut in the market, but I'm confident that in more than three years, we will see the gas balance again," Attiyah said.

Strong demand growth in India and China could absorb most of the production, he said.

China's LNG imports are expected to surge this decade to reach 46 million tonnes by 2020, but rising domestic gas production will probably dampen its appetite for imports after that, consultants Wood Mackenzie said in July.

Attiyah said he was confident conventional gas would stay relevant in markets, even in the United States, where shale gas supplies are increasing.

"We're seeing new markets there. New customers there. Customers even if you talk five years ago no one will believe you," he said, referring to North and Latin America, where Qatar has sealed new contracts with Canada and Chile.

When asked about competition from Australia which is also becoming a major LNG supplier, Attiyah said: "We're not going to dominate the supplies."

"We understand consumers would like to see more suppliers to create oil security. But going forward, Qatar will, today, be the main supplier to the world," he said.

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