QatarEnergy warns of long-term LNG shortfall after Iran attacks

Iranian strikes on Qatar’s energy infrastructure have knocked out 17% of the country’s liquefied natural gas (LNG) export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, QatarEnergy CEO Saad al-Kaabi told Reuters.

Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in what he described as “unprecedented strikes.” Repairs are expected to sideline 12.8 million tons 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 Ramadan, attacking us in this way,” Kaabi said.

The attacks came hours after Iran targeted Gulf oil and gas facilities following Israeli strikes on its own gas infrastructure.

Kaabi warned that state-owned QatarEnergy may have to declare force majeure on long-term LNG contracts for up to five years for shipments bound for Italy, Belgium, South Korea, and China due to the damage.

“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.

US energy giant ExxonMobil is a partner in the damaged LNG facilities, holding a 34% stake in LNG train S4 and a 30% stake in train S6, Kaabi added.

The fallout extends beyond LNG. Qatar’s condensate exports are set to drop around 24%, liquefied petroleum gas (LPG) by 13%, helium by 14%, and naphtha and sulphur by 6%. The damaged units were valued at approximately $26 billion.

QatarEnergy had previously declared force majeure across its entire LNG output following earlier attacks on the Ras Laffan production hub.

“For production to restart, first we need hostilities to cease,” Kaabi said.

By Vafa Guliyeva