"Bloomberg": Qatar suspends LNG production expansion plans after attack on its tanker in Hormuz
Qatar has suspended rapid expansion efforts at the world's largest LNG facility after an attack on one of its tankers in the Strait of Hormuz raised safety concerns, potentially tightening global gas supply.
Qatar has suspended rapid expansion efforts at the world's largest natural gas liquefaction facility, after an attack on one of its tankers in the Strait of Hormuz raised fears that transit through the vital waterway remains fraught with significant risks.
Officials at QatarEnergy held a series of meetings following the attack on Tuesday, and CEO Saad al-Kaabi decided to suspend plans to boost production at the Ras Laffan complex, according to people familiar with the matter. Some of the people, who asked not to be identified due to the sensitivity of the issue, said operations would remain at a minimum for safety reasons, and the number of vessels scheduled to dock at the facility would be reduced in the coming days.
The suspension represents one of the most significant repercussions of rising tensions this week, amid attacks on several ships near the Strait of Hormuz and the United States carrying out strikes against Iran for two consecutive days. President Donald Trump also raised the possibility of a full-scale war on Wednesday, the worst-case scenario for energy producers in the region who are gradually recovering from the impact of the conflict.
QatarEnergy did not immediately respond to a request for comment.
Delaying the production increase at Ras Laffan threatens to exacerbate supply tightness in the global gas market, heralding fiercer competition between Asia and Europe for available supplies as they rebuild inventories ahead of next winter. Spot prices for LNG in Asia have risen more than 80% from pre-war levels, highlighting concerns surrounding the resumption of production in Qatar, which provided about a fifth of global LNG supplies last year.
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Since the US and Iran signed a provisional peace agreement in June, Qatar has pressed ahead with plans to restore most of its suspended LNG production within two months. It has been running some production facilities at Ras Laffan at reduced capacity, ready for a rapid increase when the time is right, according to some people who expected this situation to continue, as the company still aims to boost exports as quickly as possible after the safe reopening of Hormuz.
Loading gas from Ras Laffan
The people said Qatar increased loading operations and returned empty tankers to load more fuel. There are currently 11 empty LNG tankers outside Ras Laffan, according to ship tracking data.
They indicated that these efforts will now be temporarily suspended, as Qatar, the world's second-largest LNG exporter, waits for tensions to subside.
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The giant facility had been largely shut since early March after an Iranian drone attack, and about 17% of the facility's production capacity was damaged in a separate missile strike weeks later. Repairs to that part of the project are estimated to take at least three years.
Force majeure notices
Over the past week, QatarEnergy extended force majeure notices on LNG supplies to some of its Asian customers until August, causing some market uncertainty about when the company will resume production, according to Bloomberg. In Europe, Italian utility Edison said the clause would now remain in effect until early September for its imports.
Uncertainty over Qatar's timelines increased after the country said its LNG tanker Al Rakyat was struck by Iran on Tuesday. The vessel was disabled and its crew evacuated shortly afterward, according to Bloomberg. This was the first time a Qatari LNG tanker had been targeted since Iran's war began in late February.
Two other ships were also attacked, and Iran fired projectiles at some Gulf states after coming under attack from the US this week. The tensions have brought maritime traffic through the Strait of Hormuz to a near standstill on Thursday.
Original source: Aleqtisadiah
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