Qatar Just Became a Buyer of American Gas: 4 Million Tonnes Contracted Through 2054, and a $25/MMBtu Spread the Oil Trade Never Saw

The hedge started as spot cargoes and hardened into a 28-year contract. On Jul 29, Reuters reported that QatarEnergy had bought 33 US spot cargoes this year for delivery to South Korea, Taiwan, Bangladesh, India and Japan, worth about $1 billion on Reuters' calculation, with 28 already delivered while QatarEnergy was under force majeure. On Sep 13, Reuters reported that the company was seeking long-term US agreements through 2031 to replace the roughly 12.8 mtpa of annual capacity lost when two of fourteen Ras Laffan lines were damaged in March, with repairs set at three to five years and force majeure extended month by month through November.

Why does the market look at oil? Because oil is where a chokepoint becomes visible fastest: barrels queue, tankers reroute and the price of the molecule that cannot move rises first. Gas clears differently. With almost no spare liquefaction capacity, the adjustment runs through demand destruction rather than supply substitution, and OIES modelling published Oct 20 puts the 2027 supply gap at 49 bcm if Gulf exports do not restart until October 2027, with 85% of that gap absorbed by lower imports and demand. The equity consequence therefore sits with whoever can liquefy and sail molecules outside the strait, not with the oil complex.

Qatar is paying two prices for the same molecule: an American price and an Asian price. Reuters put the 33 spot cargoes at about $1 billion, roughly $30 million each. Cheniere realized $7.07/MMBtu on its FY2025 third-party long-term volumes, $14,804 million of revenue on 2,095 TBtu, while new Gulf Coast capacity is being contracted at materially higher tolls: Venture Global's implied weighted average fixed liquefaction fee was $6.79/MMBtu in the third quarter alone, on top of hub-linked gas. At $32.36 in Asia, every molecule Qatar buys in Texas carries a spread of more than $20 before freight and insurance.

Cheniere's contracts are deliberately dull: a fixed fee per MMBtu, adjusted for inflation each year, plus a variable fee generally equal to 115% of Henry Hub. The FY2025 10-K also shows that about 90% of anticipated production from the liquefaction projects is contracted through the mid-2030s. Those legacy tolls cannot reprice, which is exactly why new Gulf Coast capacity matters, because Plaquemines and Calcasieu Pass are being monetized at fixed fees that on Venture Global's own third-quarter disclosure approach the entire price Cheniere realizes on every unit of its older volume. The tell is that the new tolls exist at all: before the Strait closed there was no reason to pay a premium for molecules that can be loaded in Texas, and now it is the only place that can load them. Hormuz risk has repriced liquefaction capacity, not just the barrel price.

Cheniere reported third-quarter revenue of $6.17 billion, net income of $1.17 billion and adjusted EBITDA of $1.90 billion, and raised full-year guidance to $8.75-9.25 billion of adjusted EBITDA from $7.90-8.40 billion, with distributable cash flow of $6.05-6.55 billion and a dividend raised more than 12% to $0.625 a share. None of that comes from Qatar. The first cargo under the Cheniere SPA lifts in the early 2030s, so the roughly $850 million midpoint raise prices spot molecules rather than the Qatar hedge.

Freight did not follow the gas price, which is the cleanest evidence that this premium is not being paid where the market is watching. Atlantic spot charter rates fell below $50,000 a day in mid-August while the Pacific traded near $70,000, even as Asian spot LNG was rising on strait risk. The reason is that freight is paid for ships and distance: US LNG liftings fell from almost 12 million tonnes in March to about 10.7 million tonnes in July, the carrier fleet grew about 4%, and US tonne-miles rose about 55% from March as cargoes travelled further. Free-on-board terms put the chartering decision with the buyer, so every American cargo QatarEnergy takes has to find a ship, and Qatari tonnage that cannot load through the Strait is available to carry it.

The American side of this hedge is cheap gas, and that is precisely why Qatar can afford it. The EIA expects Henry Hub to average $3.48/MMBtu in 2026 and $3.16 in 2027, with US LNG exports rising from 17.6 billion cubic feet a day in 2026 to 18.6 in 2027. Storage held 3,567 Bcf on Oct 9, 1.3% above the five-year average, and Henry Hub slipped to $2.52 on Oct 26 as mild weather returned, so there is no feedgas squeeze yet and no reason for the US side of the trade to get expensive. QatarEnergy's 7 mtpa of purchases would add roughly 0.9 billion cubic feet a day of feedgas demand at about 0.12 Bcf/d per mtpa of liquefaction, comparable to the entire increase in US LNG exports the EIA projects over the next two years, though the Cheniere tranche does not arrive before the early 2030s.

The premium lands on importers, and the arithmetic is brutal. OIES modelling published Oct 20 assumes Gulf exports do not restart until October 2027; under that case the 2027 supply gap reaches 49 bcm, other exporters add only 7.3 bcm, and 41.7 bcm, or 85% of the shortfall, is absorbed by lower imports and demand: Europe takes a 20.8 bcm cut, China 6.6 bcm and South Asia 5.4 bcm. Asian spot LNG has cleared above $30/MMBtu for the first time in four years, Japan's power-generation inventories stood at only 2.64 million tonnes on Oct 11, and EU storage was 74.3% full against a five-year average near 89%. That is why the only meaningful relief for Asian buyers is American molecules, priced off the same US gas complex that Qatar is now buying into, and why PetroChina and Tokyo Gas sit on the wrong side of the arithmetic even as the oil side of the premium still reaches integrated producers.

The facts are simple: QatarEnergy bought 33 US cargoes worth about $1 billion, signed 4 mtpa with Cheniere Energy through 2054 and is discussing at least 3 mtpa with Venture Global, while its own export capacity is down 12.8 mtpa for three to five years and JKM prints $32.36 against a $2.52 Henry Hub. The inference is that Hormuz has become an access problem rather than a volume problem, and access is bought in the Atlantic Basin, so the money moves to whoever can liquefy and sail molecules without crossing the Strait. The speculation is about timing: a delayed restart makes Qatar's purchases look prescient and leaves importers paying a peak TTF of $31.35/MMBtu, while a reopening makes the 2030s volumes look like a panic purchase by a producer with too much money and too few options.