According to Bloomberg's report on July 17, due to the ongoing disturbances in the Hormuz Strait, which threatens the long-established supply chain, Chinese liquefied natural gas (LNG) importers are exploring ways to reduce their dependence on Qatar.
According to people familiar with the matter, major domestic buyers in China are negotiating with liquefied natural gas exporters that do not rely on the Persian Gulf route for transportation.
Sources familiar with the matter said that these Chinese companies hope to sign long-term agreements that will begin supplying goods by 2030, with a contract period of at least 10 years; Canada is one of the potential sources of supply being considered.
If this change occurs, it will be one of the most significant signs to date, indicating that the war in Iran could significantly reshape the global liquefied natural gas market, as major importing countries are reevaluating their dependence on the Persian Gulf region.
As the world's largest importer of liquefied natural gas, China is also Qatar's largest customer. Last year, Qatar supplied nearly 30% of China's liquefied natural gas needs. In recent years, the two countries have signed several contracts of the largest scale in the industry, providing important support for Qatar's large-scale expansion plans.
Sources familiar with the matter said that China is not expected to attempt to cancel the existing, legally binding contract with Qatar.
Sources familiar with the matter say that another consideration for Chinese companies is to avoid signing long-term supply agreements with the world’s largest liquefied natural gas exporter, the United States, due to trade tensions. Last year, in response to U.S. tariffs on Chinese goods, Beijing imposed tariffs on U.S. liquefied natural gas. Since then, the volume of liquefied natural gas transported between the two countries has significantly decreased.
Qatar originally planned to quickly resume its natural gas production after an Iranian attack in March. However, the conflict in the Hormuz Strait escalated again, effectively blocking this important route once more, forcing Qatar to suspend efforts to restart Ras Laffan—the world’s largest liquefied natural gas plant.
According to ship tracking data compiled by Bloomberg, from April to June this year, China imported only about 100,000 tons of liquefied natural gas from Qatar. This was a significant decrease compared to the same period last year, when the figure was 4.7 million tons.
