Assaulting Ras Laffan. Millions of tonnes of LNG from the Middle East fall out of the market

The Iranian attack of March 18 on the Ras Laffan complex in Qatar led to permanent damage to part of the LNG infrastructure. QatarEnergy reported the launch of the "force majeure" clause in part of long-term contracts, which means a multi-annual limitation of supply to selected customers in Asia and Europe.

Ras Laffan after the March 18 attack

The 18 March attack on the Qatari Ras Laffan complex hit one of the most important production and export centers of liquefied natural gas in the world. It is from there that Qatar sends a large part of LNG to customers in Asia and Europe.

According to information provided by President QatarEnergy and energy minister Qatar Saad al-Kaabi, the damage covered approximately 17 percent of the national LNG production capacity. With an annual export capacity of 77 million tonnes, this represents an exclusion from the market of a volume of around 13 million tonnes per year. Repair damaged infrastructure It could take three to five years.

The ‘force majeure’ clause covers part of the contracts

In response to the damage, QatarEnergy launched the "higher power" clause in selected long-term contracts. This applies primarily to contracts linked to specific technology lines in Ras Laffan which were damaged during the Iranian attack.

In practice, this means that the restrictions did not cover the entire Qatar export portfolio, but only part of the supply to customers related to damaged installations. Among the countries mentioned in this context are China, Italy, South Korea and Belgium.

Some 13 million tonnes of LNG per year may come out of the market

Although gas remains in the deposit, the infrastructure responsible for processing and shipping became a problem. This is why the market responds not to the physical exhaustion of raw material but to the reduction of production and export capacity.

In practice, this means that even about 13 million tonnes of LNG per year can be excluded from global trading for longer. This is a volume large enough that its lack quickly reflected on commercial sentiments and gas valuations.

The impact will be felt in Asia and Europe

The greatest pressure may arise where the Qatari LNG plays an important role in the balance sheet Energy Or in the gas redistribution system. This is particularly the case in South Korea, but in Europe Italy and Belgium will be the first to feel this.

The Italian gas system has been using LNG supplies from Qatar for years, while the Zeebrugge terminal remains one of the key transhipment and redistribution points for north-western Europe. The reduction of contractual volumes can therefore translate not only into an increase in prices but also into more pressure on the spot market.

Local damage, global consequences

Ras Laffan and Iranian South Pars are linked to the world's largest natural gas deposit system, extending on both sides of the Qatar and Iran sea border. As a result, the armed conflict that caused the US and Israel hit sensitive the global energy market.

This shows that a single attack on critical infrastructure can have effects far beyond the armed area itself. In this case, the consequences will not only be felt by direct contractors of QatarEnergy, but by the global LNG market as a whole. — from Asia to Europe.