QatarEnergy Declares ForceMajeure For LNG Shipments Through May, Representing As Many As 90 Cargoes

The already dismal LNG supply situation just got worse.

With up to 20% of global LNG flows shuttered due to the ongoing blockade of the Hormuz Strait and the extensive damage of Qatar LNG infrastructure, QatarEnergy has declared force majeure on some of ⁠its long-term liquefied natural gas (LNG) supply contracts, including ‌for customers ⁠in Italy, Belgium, South Korea ⁠and China, effectively canceling contractual obligations. That would represent as many as 90 cargoes according to Bloomberg.

The move on Tuesday comes amid ongoing production and supply disruptions caused by the United States-Israeli war on Iran.

Force majeure is a clause in contracts that allows a party to be excused from its obligations due to unforeseeable events. Petroleum companies in Kuwait and Bahrain have also recently invoked force majeure.

Last week, QatarEnergy CEO Saad al-Kaabi said an Iranian attack on Qatar’s Ras Laffan gas facility wiped out about ⁠17 percent of the country’s LNG export capacity, causing an estimated $20bn in lost annual revenue and threatening supplies to Europe and ⁠Asia. Repairs are expected to take 3-5 years. 

Saad al-Kaabi told the Reuters news agency that two of Qatar’s 14 LNG trains, the equipment used to liquefy natural gas, and one of its two gas-to-liquids facilities were damaged in Iranian attacks.

The repairs will sideline 12.8 million tonnes of LNG production per year for three to five years, he said.

The Iranian attack on Ras Laffan came after the Israeli military targeted Iran’s offshore South Pars gasfield, the largest in the world, located off the coast of the country’s southern Bushehr province. 

Majed al-Ansari, spokesperson for Qatar’s Ministry of Foreign Affairs, had condemned Israel for targeting South Pars, noting that the Iranian gasfield is an extension of Qatar’s North Field. Qatar and other Gulf countries have also condemned Iran’s continued attacks on energy infrastructure across the region, stressing that the strikes violate international law and the United Nations Charter.