Hungary inks deal for Qatari gas - Al-Monitor
Hungary inks deal for Qatari gas - Al-Monitor: Independent, trusted coverage of the Middle East
DUBAI — Hungary will start receiving shipments of liquified natural gas from Qatar beginning in 2027 in an agreement between the two countries announced Friday.
Hungarian Foreign Minister Peter Szijjarto said that Qatar, the world's biggest LNG exporter, currently has no more LNG available for export and the details of the agreement are yet to be determined, according to Reuters.
Szijjarto said at a Friday news conference, "We have reached a political agreement, which is now followed by talks between energy companies Qatargas and Hungary's MVM to determine the quantity, pace and shipment route of the supplied gas to Hungary from 2027."
Hungary’s demand for LNG has surged along with the rest of Europe, propelled by sanctions imposed by the European Union on Russia after it declared war on Ukraine in February 2022.
Natural gas makes up about a quarter of the EU’s overall energy consumption, with more than 15% of its gas needs imported through natural gas piped or shipped, according to the European Commission. Before the conflict with Ukraine, Russia supplied around 40% of all pipeline imports.
As the EU reduced its reliance on Russian gas, it increased its US imports. The United States became the EU’s top LNG supplier at 41% of its imports in all of 2022, according to data collected by commodity market solutions company Kpler.
Europe is also looking at Qatar, which reclaimed its position as the largest LNG exporter in 2022 with 80 million tons of LNG, according to the Gas Exporting Countries Forum report. According to ship-tracking data collected by Bloomberg, the Gulf state tied with the United States as the world’s top LNG exporter last year with 81.2 million tons.
Last November, Qatar signed a 15-year deal to supply Germany — Europe’s largest gas market — with two million tons of LNG annually, reported Reuters. Deliveries will start in 2026.
Qatar expansion
The Gulf country is looking to increase production and maintain its position as a leading exporter with plans to supply 40% of all new LNG that enters the global market by 2029, Qatar’s Energy Minister Saad al-Kaabi said in July at the LNG 2023 conference in Vancouver.
QatarEnergy signed a deal with Shell in July for the Gulf state’s North Field East Expansion, the first phase of the world’s largest LNG project, following deals with TotalEnergies, Exxon, ConocoPhillips and Eni, reported Reuters. The expansion includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tons per year from 77 by 2027.
Anticipating its future supply growth, Qatar inked a major 27-year LNG deal with the China National Petroleum Corporation to provide 4 million tons of LNG per year in June this year. This is the second major gas deal between Qatar and China over the last year. In November 2022, QatarEnergy signed a similar deal for 4 million tons of LNG annually in a 27-year contract with Chinese oil giant Sinopec.
Qatar, looking to ink more contracts, is offering shorter and cheaper LNG deals to select countries, according to Bloomberg, reporting on QatarEnergy’s 15-year supply deal signed in June with Bangladesh's state-owned PetroBangla for 1.8 million tons starting in 2026.
Japan’s Prime Minister Fumio Kishida’s visited Doha in July on his Gulf tour, under pressure from Japan’s gas lobby to secure new LNG deals. Japan and Qatar agreed to widen their countries’ relationship to include more energy trade, and the East Asian country also took steps to secure future deals with other regional LNG producers.
The following month in the neighboring United Arab Emirates, Japan Petroleum Exploration Co. signed a five-year agreement with the Abu Dhabi National Oil Company's gas processing unit, ADNOC Gas, valued between $450 million and $550 million on Thursday, according to an ADNOC Gas press statement.