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Qatar to to build 30 MMTPA of new capacity: Domestic gas producers will be under pressure
Jul 06: Qatar's decision to add an extra 30% to its existing LNG capacity by 2024, taking the total up to 100 MMTPA is likely to dramatically upset the projected demand-supply balance in the global LNG market.
8This will mean that the supply gap that was initially meant to emerge by 2021, later postponed to 2024, is likely to be put off by another few years.
8Given that there will be excess supplies coming in from the US and Australia as well, Qatar is likely to fight hard to retain and deepen its market share in proximate markets like India where it has a comparative advantage in relation to other suppliers.
8In likelihood, Qatar is likely to under cut other suppliers to India.
8The upshot of all of this is that the new gas to be produced by ONGC and RIL-BP will have to stay competitive to the landed price of LNG set essentially by Qatar, essential for the life of these projects. Peak production from these fields will happen at a time when LNG prices will be under pressure.
8Qatar's new plans will work to hamstring Indian producers, curtailing their pricing power, keeping their margins under stress.
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