Qatar Has a Competitive Edge Against the U.S. in the Struggle to Reach New Gas Markets

QatarEnergy, a state-owned firm that operates LNG tankers like this one, earns roughly $30 billion in profit each year. (Courtesy QatarEnergy)

About the author: Leslie Palti-Guzman is the founder of Energy Vista, a strategic advisory firm. She hosts the Energy Vista podcast and is a nonresident fellow at the Center for International Studies and at New York University’s Center for Global Affairs.

Liquefied natural gas exports from the U.S. next year could be redefined by two forces: the rise of U.S. natural-gas prices and a flood of low-cost Qatari LNG entering an uncertain global market in less than two years. U.S. policymakers shouldn’t underestimate Qatar’s competitive advantages, which may impact the ability of U.S. exporters to place their cargoes abroad in the year ahead.

Doha is expanding from roughly 77 million tons a year of LNG export capacity to more than 110 million tons before the end of the decade, with potential plans to grow to 142 million tons. The U.S. is on a similar growth trajectory. The U.S. LNG industry will nearly double its export capacity to 160-170 million tons by the early 2030s. On paper, the U.S. still has the largest exporting capacity. But export capacity isn’t the same as real exports.

Importantly, these two booming projections derive from very different business models. The U.S. and Qatar won’t be equally resilient in a global economy that could deliver a double-whammy to the industry through low international gas prices and weak demand.

The U.S. LNG industry consists of a mosaic of private companies, portfolio players, and producers, which means project-level strategies don’t necessarily align with one another. Venture Global, Cheniere, TotalEnergies, Shell, Sempra, among many others, all respond differently to price signals.

In comparison, Qatar has one state-owned entity calling the shots for QatarEnergy. Qatar also works with joint venture partners, who invest in its liquefaction plants and offtake some volumes. This simpler structure means Qatar is entering its era of LNG expansion from a position of strength. It is the lowest-cost LNG producer in the world, supported by feedstock gas, or raw gas before being processed, which costs about 25-50 cents, and by other rich natural gas liquids. Both improve project economics.

Meanwhile, the U.S. benchmark natural-gas prices soared to a three-year high of $5 per million British thermal units in early December. That price rise was driven by unseasonably frigid temperatures, low wind, and a surge in LNG exports. It remains to be seen if the higher prices will persist as more LNG comes online in the coming months. Domestic dry production, which creates gas output but not oil, could also start to pick up. It may become more economic with higher prices, which in turn would loosen the supply-demand balance.

In a global bust cycle where supply is too abundant and international prices are weak, supply will need to be cut somewhere. The U.S. will always serve as this market balancer because its commercial structure permits LNG cargo cancellations. And if gas prices in Europe continue to slip, a debate about the viability of U.S. cargo will begin in full, regardless of Qatar’s next move. Europe is already bearish. Without cold weather or a demand surprise, the margin for U.S. LNG looks thin.

Qatar will also become a much more influential trader. QatarEnergy Trading, the trading arm of QatarEnergy, will lift and resell 10-12 million tons of flexible spot LNG from Golden Pass in Texas. By the early 2030s, Qatar’s trading portfolio could exceed 30-40 million tons from non-Qatari supply, on top of its own growing supply. It could even become a serious competitor to portfolio players like TotalEnergies and Shell.

The battlefield for LNG dominance might start in Europe, but the real opportunity is in South and Southeast Asia. Here Qatar has a clear upper hand.

QatarEnergy doesn’t have to answer to banks or mind the quality of its buyers. It can therefore unlock demand in places where infrastructure, financing, or political risk might slow down private suppliers. This gives Doha the ability to place cargoes into emerging markets in Asia where private U.S. developers struggle to operate. In Pakistan or Bangladesh, for example, creditworthiness and payment guarantees are real friction points for American exporters.

India, Pakistan, Bangladesh, the Philippines, Thailand, and Vietnam are all natural targets for Doha’s next wave of expansion. Their demand is price sensitive and their growth trajectory stretches well beyond 2030. The U.S. will have to play its own commercial and diplomatic cards to establish market share in these countries.

The big unknown is Russia. If Russian gas returns to Europe in meaningful volumes after a peace settlement with Ukraine, the global competitive landscape would change. Qatar might face a tougher fight to sell its LNG into Europe. It might accelerate its push into Asia instead. U.S. exporters would find themselves squeezed between Qatari and Russian gas, two lower-cost rivals.

The next decade of LNG isn’t only about new projects, it is about commercial diplomacy, soft power, and geopolitics. Qatar is preparing to play a long game. The U.S. will need to be clear-eyed about the competition and use commercial and diplomatic engagements to continue selling its natural gas abroad.

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