Qatar announced force majeure on its gas exports on Wednesday due to the ongoing U. S.-Israeli war on Iran. This situation will likely lead to global gas shortages for several weeks, even if the conflict ends immediately, as Qatar provides 20% of the world’s liquefied natural gas (LNG). Qatar Energy (QE), the state-owned company, has halted gas production and will completely stop gas liquefaction. It is expected that the facility will remain shut down for at least two weeks.
After the restart decision is made, it will take another two weeks to return to full production capacity. QE has begun informing some of its Asian and European clients about the shutdown but has not provided details on its duration. The production stop has caused increased competition for LNG between the Atlantic and Pacific regions, driving up gas prices and freight rates to multi-year highs.
The shipping slowdown in the Strait of Hormuz has prevented export cargoes from leaving Qatar, which stops the liquefaction process. Despite having significant storage at the Ras Laffan plant, this capacity is limited given the scale of ongoing production. The shutdown involves gradually reducing production and managing gas flows to protect equipment. To restart, cooling down the equipment slowly is vital, and the restart of production trains must be sequenced to avoid operational issues.
With information from Reuters
