Concerns Over Future LNG and Natural Gas Supplies
Saad Sherida al-Kaabi, Qatar’s Minister of State for Energy Affairs and CEO of QatarEnergy, has voiced significant concerns regarding the potential for future shortages in liquefied natural gas (LNG) and natural gas supplies. Speaking at the Doha Forum, al-Kaabi linked this possibility to two primary factors: the rapidly increasing energy demand from artificial intelligence (AI) data centers and a persistent trend of underinvestment in new production capacity.
While not explicitly stating that AI alone would consume all global LNG by 2035, al-Kaabi highlighted the substantial energy requirements of AI infrastructure. This surge in demand, coupled with accelerated global electricity needs, particularly from energy-intensive data centers, places significant pressure on natural gas resources. Natural gas is increasingly viewed as a vital "bridge fuel" for electricity generation.
Al-Kaabi forecasted that LNG demand could climb from approximately 400 million tonnes per annum (mtpa) currently to between 600–700 million tonnes per annum (mtpa) by 2035. A significant portion of this projected increase is attributed to the growth in energy-consuming AI applications.
“There’s underinvestment, and if that doesn’t happen in the next five to six years, we will have issues in 2035,” al-Kaabi stated at the Doha Forum. He expressed concern that a lack of investment would likely trigger a substantial spike in LNG and natural gas prices. He further noted, “Every country we talk to has 10% to 20% of their demand coming from AI.”
Global Economic Slowdown and Oil Prices
Regarding the oil market, al-Kaabi identified the global economic slowdown as the most significant challenge affecting crude prices. He suggested that an oil price range of $70-$80 a barrel would be ideal, as it would provide sufficient revenue to fund the necessary infrastructure investments required for future energy supply.
Qatar's Expansion and Global Hesitation
In response to increasing demand, Qatar, the world's leading LNG exporter, is actively expanding its North Field to boost its production capacity. However, al-Kaabi cautioned that global hesitation, influenced by uncertainties surrounding the energy transition and regulatory challenges, might hinder the pace of development, potentially failing to keep up with rising demand.
Despite these concerns, al-Kaabi remains optimistic about LNG's role as a cleaner alternative to coal. He reiterated Qatar's ongoing commitment to carbon capture and sequestration technologies.
International Energy Agency (IEA) Echoes Concerns
The International Energy Agency (IEA) has corroborated al-Kaabi's sentiments in its November World Energy Outlook. The IEA projected a significant growth in global LNG trade, estimating it to rise from 560 billion cubic meters (bcm) in 2024 to 880 bcm by 2035 and reaching 1,020 billion cubic meters by 2050. This growth is primarily driven by increasing power sector demand, fueled by the expansion of data centers and AI technologies.
The IEA report highlighted a surge in new liquefied natural gas (LNG) projects, with approximately 300 billion cubic meters of new annual LNG export capacity expected to become operational by 2030, representing a 50% increase. The United States is leading this expansion, accounting for about half of the new capacity, with Qatar contributing an additional 20%.
According to the IEA's Current Policy Scenario, the majority of this new LNG supply is anticipated to be directed towards China and Europe. This development could necessitate that the European Union reconsider its methane emissions regulations to ensure the continued operation of businesses and adequate heating for its citizens.