Iranian attacks had knocked out 17% of Qatar’s LNG export capacity, causing around $20b in lost annual revenue
A hydrocarbon facility in Qatar. PHOTO: oilandgasmiddleeast.com
QatarEnergy on Tuesday declared force majeure on some of its affected long-term liquefied natural gas (LNG) supply contracts, with counterparties including customers in Italy, Belgium, South Korea, and China.
Iranian attacks had knocked out 17% of Qatar’s LNG export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, QatarEnergy’s CEO and state minister for energy affairs told Reuters in an interview last week.
Saad al-Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the unprecedented strikes. The repairs will sideline 12.8 million tonnes per year of LNG for three to five years.
“I never in my wildest dreams would have thought that Qatar would be — Qatar and the region — in such an attack, especially from a brotherly Muslim country in the month of Ramazan, attacking us in this way,” Kaabi said.
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State-owned QatarEnergy would have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea, and China due to the two damaged trains, Kaabi had said.
“I mean, these are long-term contracts that we have to declare force majeure. We already declared, but that was a shorter term. Now it’s whatever the period is,” he said.
QatarEnergy had declared force majeure on its entire output of LNG, after earlier attacks on its Ras Laffan production hub.
“For production to restart, first we need hostilities to cease,” he said.
US oil major ExxonMobil is a partner in the damaged LNG facilities, while Shell is a partner in the damaged GTL facility, which will take up to a year to repair.
Texas-based ExxonMobil holds a 34% stake in LNG train S4 and a 30% stake in train S6, Kaabi said.
Train S4 impacts supplies to Italy’s Edison and EDFT in Belgium, while Train S6 impacts South Korea’s KOGAS, EDFT and Shell in China.
The scale of the damage from the attacks has set the region back 10 to 20 years, he said.
“And of course, this is a safe haven for a lot of people, to have a safe place to stay and so on. And that image, I think, has been shaken.”
