Qatar is experiencing its worst crisis ever due to a three-week war with Iran, which has resulted in missile and drone attacks on its critical energy infrastructure. The attacks have significantly damaged tankers, refineries, and the world's largest liquefied natural gas (LNG) complex at Ras Laffan, according to Saad al-Kaabi, CEO of QatarEnergy and chairman of Qatar Airways. Al-Kaabi, who also serves as the country's energy minister, stated he had previously warned US officials and energy executives about the dangers of provoking Iran and the potential for such attacks.
The damage at Ras Laffan is substantial, with two of Qatar's 14 LNG trains and one of its two Gas-to-liquids (GTL) facilities affected. This has reduced Qatar's LNG export capacity by 17%, amounting to 12.8 million metric tons per annum (MTPA) of LNG being offline. The repairs are estimated to take three to five years and will result in approximately $20 billion in lost annual revenue. QatarEnergy will be forced to declare force majeure on some long-term LNG contracts for up to five years, impacting deliveries to countries including China, South Korea, Italy, and Belgium.
Beyond LNG, the attacks have also impacted the Pearl GTL facility, a Shell-operated project, and will lead to significant losses in other associated product exports. Condensate exports are projected to drop by approximately 24%, liquefied petroleum gas (LPG) by 13%, and helium by 14%. Naphtha and sulfur exports are also expected to fall by about 6% each. The cost to rebuild the damaged facilities is estimated at $26 billion.
The conflict has also stalled the massive North Field expansion project, which was intended to increase Qatar's liquefaction capacity from 77 million to 126 million tons per annum by 2027. Al-Kaabi noted that all 10,000 workers were evacuated from the offshore facilities, leading to a delay of at least several months, if not more than a year. He emphasized that production can only restart after hostilities cease, and even then, it would take at least three to four months to fully resume operations.
Al-Kaabi warned that the wider economic impact of the war would be felt across all Gulf economies, taking the entire region back 10 to 20 years. He highlighted that tourism would be halted, airline operations severely disrupted, and trade significantly reduced, with nothing moving from any of the ports. For economies heavily reliant on oil and gas, government spending would be drastically curtailed.
