Qatar Doubles Down on LNG Production After Sanctions Slam Europe

Global gas producers continue to increase output after Western sanctions on Russia wreaked havoc on European economies.

Western sanctions imposed on Russia after the country’s special military operation in the Donbass backfired spectacularly, causing economic hardship and deindustrialization across Europe. Now one Middle Eastern country is increasing production of liquified natural gas (LNG) to help address shortfalls.

Qatar announced a multibillion dollar expansion of LNG production on Sunday that will raise the country’s output to 142 million tonnes per annum (mtpa).

“We still think there's a big future for gas for at least 50 years forward and whenever we can technically do more, we'll do more,” said QatarEnergy chief Saad al-Kaabi. The investment runs counter to predictions of a drop in demand as the world transitions towards green energy sources.

“We see that Europe is going to need gas for a very, very long time,” he added, speaking at a press conference in Doha. “But the growth in Asia is definitely going to be bigger than the growth in Europe, basically driven by population growth.”

“We need more gas for the world, and we need more players,” al-Kaabi pointed out.

Qatar is one of the world’s top exporters of LNG, along with Russia, Australia, and the United States. The US recently announced a pause in expansion of exports amidst concerns global sales drive up domestic energy costs. US President Joe Biden also faces pressure from environmental activists opposed to increased fossil fuel production.

Al-Kaabi expressed willingness to help make up the difference, but criticized US policy.

“Buyers will not go for these [American] sellers if every day the government could stop the process,” he said. “It’s very difficult to have long-term planning when you have that.”

Former US President Barack Obama encouraged increased domestic fuel production during his time in the White House, making the United States a key player in the global LNG market. Despite the Democratic Party’s liberal reputation of pro-environment policy, Obama frequently took credit for encouraging the boom.

Qatar's exit from OPEC in 2019 amid a regional diplomatic crisis and Saudi-led blockade signaled its shift towards a focus on LNG production over oil-centric strategies. The move strengthened Qatar's position as a global energy powerhouse and demonstrated its resistance to geopolitical pressure.

US energy policies have since created an opportunity for Qatar to expand its LNG production. Qatar's investment in LNG capabilities positions it as a crucial player in the global energy supply chain, contributing to stability amid geopolitical tensions and environmental debates.