QatarEnergy's force majeure on liquefied natural gas (LNG) exports is set to extend into a fourth month, particularly impacting European buyers like Italy's Edison. Edison, the Italian branch of French energy giant EDF, confirmed that QatarEnergy will be unable to deliver LNG cargoes due by mid-September, bringing the total number of cancelled shipments between April and September to 21. These cancellations represent approximately 2.7 billion cubic meters ($2.7 billion) of gas, which is a significant portion of Italy’s annual demand of 62 billion cubic meters ($62 billion) in 2024.
The initial force majeure declaration in early March followed Iranian attacks on Qatar's Ras Laffan facility, which caused substantial damage and disrupted operations. Additionally, an explosion at the Barzan local gas supply facility, also in Ras Laffan, killed 13 people, further exacerbating the issues. Approximately 17% of Qatar’s total LNG production capacity, amounting to about 12.8 million tonnes per year ($12.8 million), is expected to remain offline for up to five years while two facilities undergo repairs. The repair costs are estimated to be in the tens of billions of dollars ($10 billion+).
While some Asian LNG buyers anticipate that QatarEnergy will allow its force majeure to lapse for them by mid-July, the situation for European buyers remains more challenging. Analysts had initially expected Qatar to restore all available LNG production by October, excluding the 17% from the two damaged trains, but the latest delay with Edison indicates further setbacks. Despite these challenges, Qatar is reportedly bringing empty LNG ships through the Strait of Hormuz, signaling preparations to restart shipments from the undamaged parts of its facility, representing about a fifth ($0.2) of global supply.
