(Bloomberg) – Iran’s latest attack on Qatar damaged facilities that produce about 17% of its liquefied natural gas export capacity, Reuters reported, citing QatarEnergy’s chief executive officer.
Repairs will take three to five years and sideline 12.8 million tons per year of LNG, CEO Saad al-Kaabi said, according to the news service. Two of the plant’s 14 production trains were damaged, with repairs expected to take years, people with knowledge of the matter told Bloomberg.
The outage will cost an estimated $20 billion in lost annual revenue and threaten supplies to Europe and Asia, al-Kaabi told Reuters, reiterating that hostilities will need to end for production to resume. In addition to the two trains, one of two gas-to-liquids facilities was also damaged.
The strike sent natural gas prices soaring, with European futures rising as much as 35% earlier Thursday to more than double their prewar levels. The surge underscores the long-term inflationary risks from the conflict in the Middle East, which is now well into its third week.
QatarEnergy said earlier that several LNG facilities at Ras Laffan came under missile fire, which caused “sizable fires and extensive further damage.” The incident marked yet another escalation in hostilities in the region and follows a string of attacks targeting oil and gas infrastructure in recent days.
QatarEnergy didn’t respond to Bloomberg’s request for comment.
The LNG plant had already halted production after a previous drone strike. But the latest attacks were more devastating, and a lengthy shutdown will leave buyers — particularly in Asia — scrambling to make up millions of tons of lost fuel.
QatarEnergy will have to declare force majeure on long-term contracts for as long as five years for supplies bound for some customers in Europe and Asia, Reuters cited al-Kaabi as saying. In addition, Qatar’s exports of condensate could drop by almost a quarter, while liquefied petroleum gas (LPG) may fall 13%, it added.
