Qatar Gas Transport Company and Norwegian shipping business Hoegh LNG have embarked on a joint project to open new markets for Qatar to sell its liquefied natural gas (LNG) via floating import terminals.
Hoegh LNG, a developer of floating LNG import terminals, expects to start work on the import terminal project in a matter of months, CEO Sveinung Stohle told Reuters.
Stohle said Hoegh LNG and Qatar Gas Transport Company, which operates a large fleet of LNG tankers, are evaluating countries in which they could establish a floating terminal, naming South America and south-east Asia as attractive prospects.
Top LNG producer Qatar, which is in the midst of a diplomatic crisis that erupted when Saudi Arabia and other Arab states cut diplomatic and transport links with Doha in early June, faces tough competition for global market share as new suppliers from Australia and the United States ramp up exports.
The tiny Gulf state lifted a self-imposed moratorium on new production in April and this month caught rivals off guard by embarking on plans to boost LNG output by 30 percent to 100 million tonnes a year.
With large supply deals with Japan expiring early in the next decade, Qatar will need to stimulate fresh demand for its LNG.
"The whole strategy behind this agreement is to find new markets for Qatari LNG," Stohle said.
The terminals, which are also known as floating storage and regasification units, are useful for developing countries seeking access to cheap gas on tight budgets.
Floating LNG terminals have shaved years off the time needed for new customers to access supply and are also cheaper than traditional land-based facilities.
A near 70 percent drop in spot LNG prices since February 2014, owing to falling Asian demand, is attracting poorer countries that had previously been excluded from gas trading.
A total of 40 floating import terminal projects exist in varying stages of development across the globe. Hoegh LNG operates seven and has a further three on order from shipyards, Stohle said.
"We have drawn up a list of different potential projects that we will look at in detail," he said, adding that any new projects with Qatar's LNG shipping company will require new terminals to be built.
(Reporting by Oleg Vukmanovic; Editing by David Goodman)