Iranian attacks put 17 percent out of use. Qatar's liquefied natural gas (LNG) export capacity, causing an estimated loss of $20 billion in annual revenues and threatening supplies to Europe and Asia, QatarEnergy's president and minister of state for energy told Reuters on Thursday.
Saad al-Kaabi reported that as a result of the unprecedented strikes, two of Qatar's 14 LNG process lines and one of two gas-to-liquid fuel (GTL) plants were damaged. The repairs will take 12.8 million tons of LNG out of service annually for a period of three to five years, he said.
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Iran attacks
“Even in my wildest imagination, I never imagined that Qatar — or the region — would become the target of such an attack, especially from a brotherly Muslim country, and during the month of Ramadan,” Kaabi added.
Hours earlier, Iran carried out a series of attacks on oil and gas facilities in the Gulf region following Israeli strikes on its own gas infrastructure.
State-owned QatarEnergy will have to declare force majeure in the case of long-term LNG supply contracts – up to five years – to customers in Italy, Belgium, South Korea and China due to the damage to two process lines, Kaabi said.
— These are long-term contracts in which we have to declare force majeure. We have already done this, but previously it was for a shorter period. This will now cover the entire duration of the disruption, he added.
The destruction set the region back 10-20 years
QatarEnergy has already declared force majeure for all of its LNG production following earlier attacks on the Ras Laffan production center, which came under fire again on Wednesday.
“In order to resume production, hostilities must first cease,” he said.
The American oil company ExxonMobil is a partner in the damaged LNG installations, while Shell is participating in the project of the damaged GTL plant, the repair of which may take up to a year. Texas-based ExxonMobil owns 34 percent. shares in the LNG S4 line and 30 percent within S6, Kaabi said.
S4 affects deliveries to the Italian company Edison and EDFT in Belgium, while S6 affects deliveries to South Korea's KOGAS, EDFT and Shell in China.
The scale of destruction caused by the attacks set the region back 10 to 20 years, he said.
Who will get hurt?
The effects go far beyond LNG. Condensate exports from Qatar will decline by approximately 24%. while liquefied petroleum gas (LPG) will decrease by 13%. Helium production will decrease by 14 percent, and kerosene and sulfur will decrease by 6 percent.
These losses have consequences ranging from LPG used in restaurants in India to South Korean chipmakers who use helium.
The damaged installations cost approximately $26 billion.
