QatarEnergy has reported significant damage to its Ras Laffan Industrial City hub in Qatar following missile attacks by Iran, with an annual revenue loss of approximately $20bn (QR72.8bn).
The strikes on 18 and 19 March have reduced the country’s liquefied natural gas (LNG) export capacity by around 17%, significantly affecting markets in Europe and Asia.
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The attacks resulted in damage to two LNG production units, Trains 4 and 6, which collectively account for 12.8 million tonnes per annum (mtpa) of output.
Train 4 is operated as a joint venture, with QatarEnergy holding a 66% share and ExxonMobil 34%. Train 6 also involves a partnership between QatarEnergy and ExxonMobil, which own 70% and 30%, respectively.
The significant damage to the production facilities is expected to require up to five years of repairs and will necessitate the declaration of long-term force majeure.
Qatar Minister of State for Energy Affairs and QatarEnergy president and CEO Saad Sherida Al-Kaabi said: “The damage sustained by the LNG facilities will take between three to five years to repair. The impact is on 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.”
The outage is expected to result in reduced production of several associated products.
Specifically, there will be a loss of 18.6 million barrels of condensates, representing approximately 24% of Qatar’s exports.
Liquefied petroleum gas production will decrease by 1.281 million tonnes, roughly 13% of exports.
Naphtha output will drop by 594,000t, roughly 6% of exports, while sulphur production will decline by 180,000t, also around 6% of exports.
Additionally, helium production will be reduced by 309.54 million cubic feet annually, which constitutes around 14% of Qatar’s exports.
Despite the severity of the incident, no casualties have been reported due to the swift actions of emergency response teams.
In addition to the LNG facilities, the Pearl gas-to-liquids facility, operated by Shell, also sustained damage.
This facility transforms natural gas into high-quality, cleaner-burning drop-in fuels and generates base oils, which are used in the production of premium engine oils and lubricants, as well as paraffins and waxes.
The conflict stems from accusations by Iran against Israel for striking the South Pars gas field amidst escalating tensions in the region, reported Reuters.
In retaliation, Iran launched missiles targeting energy sites in Qatar and Saudi Arabia.
Located in the Persian Gulf, the South Pars gas field is a massive offshore natural gas deposit shared between Iran and Qatar. It holds an estimated 1,800 trillion cubic feet (51 trillion cubic metres) of recoverable gas, which could meet global demand for approximately 13 years.
These events have intensified geopolitical tensions and caused global oil prices to rise sharply.
US President Donald Trump stated that he has cautioned Israel against repeating such attacks and has expressed concerns over the impact on global energy markets, Reuters reported.
Saudi Arabia’s primary Red Sea port, used to reroute some shipments and reduce reliance on the Strait of Hormuz after Iran threatened to block the passage, was also hit.
