QatarEnergy has struck a landmark deal to buy 4 million metric tons of liquefied natural gas (LNG) annually from U.S. exporter Cheniere Energy, a move that underscores how the Iran war has reshaped global energy markets. The agreement, announced Thursday, spans until 2054, with deliveries expected to begin in the 2030s. The purchase price is tied to the U.S. Henry Hub price plus a fixed fee. Cheniere CEO Jack Fusco called the deal a long-term commitment to supply QatarEnergy from its Sabine Pass and Corpus Christi facilities.
The deal highlights the shifting dynamics in the LNG market, where Qatar, once a top exporter, is now forced to buy from its main competitor due to the Iran war. The conflict has severely disrupted Qatar's LNG exports after an attack on its key production facility at Ras Laffan, which damaged about 17% of its export capacity. Repairs are expected to take three years, and Qatar has declared force majeure every month since the March attack.
Qatar's energy minister, Saad Sherida Al-Kaabi, noted that the Hormuz Strait, a critical shipping route, remains blocked, making it difficult to export LNG. The long-term contract with Cheniere suggests Qatar anticipates ongoing navigation risks in Hormuz. Analysts view the deal as a significant win for U.S. LNG exporters, with Cheniere and Venture Global seeing substantial stock gains since the war began.
Wall Street remains bullish on both Cheniere and Venture Global, with analysts predicting strong upside potential. UBS has set a price target of $340 for Cheniere, implying an 18% upside from Thursday's close. Nearly 90% of analysts recommend buying Cheniere, while 60% suggest buying Venture Global, with an average price target of $17, indicating a 35% upside.