Key facts
- LNG buyers are seeking greater supply diversity due to the US-Iran war impacting Gulf shipments.
- Importers are looking for alternative LNG sources from West Africa to Indonesia.
- Producers and trading firms aim to widen supply pools by investing in gas projects and buying from different countries.
- Qatar's LNG infrastructure was damaged early in the war.
- Thai state firm PTT is seeking supplies from Oman, North America, and West Africa.
- Bangladesh is exploring Indonesia, Australia, and China for LNG imports.
- East Timor plans two new LNG plants.
- Japanese firm Inpex is developing the Abadi gas field in Indonesia, with an investment decision expected mid-2027.
Liquefied natural gas (LNG) buyers are actively seeking to diversify their supply sources amid the ongoing US-Israeli war against Iran, which has disrupted shipments from the Persian Gulf. Importers are looking for alternative fuel supplies from a range of countries, including those in West Africa and Indonesia. Producers and trading firms are also aiming to broaden their supply pools by investing in gas projects and sourcing LNG from different nations, according to officials and industry executives speaking at the Gastech conference.
Sue-Ern Tan, head of the International Energy Agency's regional cooperation centre in Singapore, noted that governments are considering not only diversification of suppliers but also supply routes. This push for diversification could lead to increased investment in projects outside of the US and Qatar, which currently dominate planned capacity additions. Qatar's LNG infrastructure reportedly sustained damage early in the conflict.
Thai state firm PTT is exploring options in Oman, North America, and West Africa for its LNG needs, with its trading arm having recently signed a long-term supply deal with Norway's Equinor. Before the conflict led to the effective closure of the Strait of Hormuz, Bangladesh primarily relied on Qatar for its LNG imports. Now, the country is considering Indonesia, Australia, and China as alternative sources, according to Bangladesh's power minister Iqbal Hasan Mahmud.
During the early stages of the Iran war, Asian state energy buyers had to procure replacement cargoes from the spot market, with companies like PetroChina and India's GAIL managing to secure supply from other regions, albeit at a premium. Tom Summers, executive vice president for LNG marketing and trading at Shell, stated that despite a loss of 36 million metric tons of supply from the Middle East, new capacity additions have resulted in a net supply loss of only about 5 million tons, or 1%-1.5% of global supply this year. He also highlighted that the addition of 70 to 80 new LNG vessels annually enhances shipping flexibility.
The high LNG prices and the demand for diversified supplies are improving the prospects for emerging producers such as Argentina, East Timor, and Tanzania. East Timor's Energy Minister Francisco da Costa Monteiro informed Reuters that the country plans to develop two greenfield LNG plants: a 5-million-ton facility for the Greater Sunrise gas fields and a 1.5-million-ton facility for leftover gas from Bayu-Undan.
Takayuki Ueda, CEO of Japanese energy firm Inpex, emphasized that upstream companies are prioritizing "portfolio resilience, portfolio diversification, diversification of supply sources, and also security for the entire supply chain." Inpex is focused on developing the Abadi gas field in Indonesia, with an investment decision for the 9.5-million-ton project anticipated by mid-2027. The company is also considering long-term diversification into the Americas, including the US and potentially Brazil. Paul Marsden, president of engineering firm Bechtel, anticipates new supply coming from East Africa through projects like ExxonMobil and TotalEnergies' Rovuma, as well as from Saudi Arabia and the Americas.