Oil & Gas

Qatar risks losing out to US in Japan LNG sales

By Dania Saadi

May 15, 2025, 2:40 PM

A tanker unloads LNG at a facility in Japan's Ishikari Bay. The Asian country is keen to diversify its suppliers of gas

Japan diversifying LNG sources
US suppliers offer flexibility
Qatari terms more strict

Liquefied natural gas customers in Japan may be turning away from Qatar for their additional needs in favour of the US.

American suppliers offer more flexible contractual terms and are adding production capacity, a Japanese government energy official said.

“Qatar is very strict,” said Yarita Masataka, director of the LNG and methane management division at the Japan Organization for Metals and Energy Security.

Japanese buyers “are very much keen to diversify the source of LNG and — from the US perspective — it is destination-free,” Masataka said.

By contrast, Qatar tends to include destination restrictions in its LNG contracts that limits the buyer’s ability to re-sell and re-route cargoes to other jurisdictions.

Japan is the world’s second-largest importer of LNG.

The Japan Organization for Metals and Energy Security is a government agency dedicated to ensuring a stable and sustainable supply of energy and mineral resources.

“Some part of the increase [in Japanese demand] should be met by US LNG, for sure, because the additional capacity is quite significant toward 2030,” Masataka told AGBI at the Flame energy conference in Amsterdam.

Already the world’s biggest producer, LNG production capacity in the US may more than double by 2030 to account for a third of global supply, according to projections by energy company Shell. Qatar is the world’s third largest producer after Australia.

As Japanese importers turn more to the US for their additional needs, imports from the Middle East are likely to be “stable” or unchanged, even though the region has the advantage of producing lower carbon intensity LNG than its US rivals, Masataka said.

Japan counts Australia, Malaysia and the US among its top sources of LNG imports, with supplies from the Middle East making up 10 to 15 percent of the total, he said.

The price of Qatari LNG is “fine” and the carbon intensity of imports is not “a dealbreaker” for Japanese buyers, said Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy.

“The lack of flexibility, especially from Qatar, is the main concern of the Japanese players,” Corbeau said.

“They want to be players and supply the Southeast Asia region where they are starting to invest in LNG terminals.”

Donald Trump has called on global LNG importers to buy more from the US as part of trade talks. He specifically appealed to Japan and South Korea to invest in a delayed LNG project in Alaska.

Japan, which imported 65 million metric tonnes of LNG last year, is forecasting demand to rise to as much as 74 tonnes per year by 2040, but less if the country meets its renewable energy production targets.

Qatar is increasing its capacity by 85 percent to 142 million tonnes per year by 2030, while Abu Dhabi National Oil Company is more than doubling its production to almost 15.6 million tonnes per annum starting 2028.