Qatar LNG export capacity hit 17% after missile strikes on Ras Laffan; repairs may take 5 years

Missile attacks on Qatar’s Ras Laffan Industrial City have reduced the country’s liquefied natural gas (LNG) export capacity by about 17% and could take up to five years to fully repair, Energy Minister Saad Sherida Al-Kaabi said on Thursday.

Providing an update on the damage, Al-Kaabi, who is also president and CEO of QatarEnergy, said the strikes caused an estimated $20 billion in annual revenue losses and forced the shutdown of key production units.

“The missile attacks reduced Qatar’s LNG export capacity by 17% and caused an estimated loss of $20 billion in annual revenue,” he said, adding that “extensive damage to our production facilities will take up to five years to repair and will compel us to declare long-term force majeure.”

The attacks, which took place late Wednesday and early Thursday, hit LNG production Trains 4 and 6 with a combined capacity of 12.8 million tons per annum.

Train 4 is a joint venture between QatarEnergy and ExxonMobil, while Train 6 is also operated in partnership with the US energy major.

Al-Kaabi said the damage would affect supplies to China, South Korea, Italy and Belgium.

“This means that we will be compelled to declare force majeure for up to five years on some long-term LNG contracts,” he added.

The strikes also targeted the Pearl gas-to-liquids facility, operated by Shell, with one of its two production trains expected to remain offline for at least a year as damage assessments continue.

The outages are expected to disrupt output of several associated products.

QatarEnergy estimates losses including 18.6 million barrels of condensates as well as declines in liquefied petroleum gas, naphtha, sulfur and helium production.

Qatar, one of the world’s largest LNG exporters, plays a critical role in supplying energy to both Asia and Europe.

The prolonged disruption is likely to intensify competition for cargoes and add upward pressure on global gas prices.

Al-Kaabi praised emergency response teams and security forces for containing fires and securing the facilities, saying their efforts ensured the situation did not result in casualties despite the scale of the damage.

“I am relieved to confirm that no one was injured by these unjustified and senseless attacks, which weren’t just an attack on the State of Qatar but attacks on global energy security and stability,” he said. The ongoing war in the Middle East escalated on Thursday after an Israeli strike on Iran’s South Pars natural gas field prompted strong retaliatory attacks on Gulf Arab neighbours’ energy infrastructure.

Iran set ablaze Qatari liquified natural gas (LNG) facilities, sending global fuel prices soaring.

Iran's state media has identified Qatar’s Ras Laffan refinery and Mesaieed petrochemical complex and holding company, Saudi Arabia’s Samref refinery and Jubail petrochemical complex and the UAE’s al-Hosn gas field as "legitimate targets" for the regime after the strike on South Pars.