QatarEnergy buying US LNG to hedge against Hormuz disruptions - CEO

QatarEnergy is purchasing long-term supplies of liquefied natural gas from the United States and other suppliers to create a trading and arbitrage hedge that would generate revenue if exports through the Strait of Hormuz face future disruptions, CEO Saad Sherida Al-Kaabi told Reuters on Thursday.

"In a scenario where you have a closure of the strait, which is the true contingency that we're looking to have, you'd immediately see a spike in gas price and you'll be able to generate revenue for QatarEnergy that otherwise wouldn't be generated," Kaabi, who also serves as minister of state for energy affairs, said.

The remarks represent the first disclosure of how Qatar, one of the world's largest LNG producers, plans to offset lost income from the Iran war and protect revenue against future disruptions in the Strait of Hormuz.

The purchase deals require no capital spending and are much cheaper than building pipelines or additional LNG trains, Kaabi said. He added that the company expects "reasonable returns" in normal circumstances while buying more LNG to capture price spikes in case of Hormuz closure.

QatarEnergy expects to sign more long-term LNG purchase deals with US and other suppliers by the end of 2026, with a target "much higher" than 7 million tons per year. The company is talking to "everybody" including Venture Global and will buy from whoever offers the best commercial terms, Kaabi said.

The CEO ruled out pipelines bypassing Hormuz, stating that any infrastructure anywhere in the region can be targeted.

QatarEnergy has not cancelled any announced project, with North Field East, South and West proceeding. The 142 million tons per year LNG expansion plan in Qatar remains unchanged, with all contracts awarded.

Two LNG trains damaged in Iranian attacks will take about three years to repair, causing Qatar to lose 17% of LNG capacity in the interim. The Pearl GTL facility is expected back by the first quarter of 2027. The company can restart full LNG production within one week of a peace deal, provided ships are available.

Kaabi said the company has met with the Iranian acting petroleum minister twice in the past two weeks to explore post-war cooperation in oil and gas.