Amanze Chinonye
Qatar’s state-owned energy company, QatarEnergy, on Wednesday declared force majeure to affected buyers after halting production of liquefied natural gas (LNG) and associated products, citing extraordinary circumstances beyond its control.
In a statement, QatarEnergy said:
“Further to the announcement by QatarEnergy to stop production of liquefied natural gas (LNG) and associated products, QatarEnergy has declared Force Majeure to its affected buyers. QatarEnergy values its relationships with all of its stakeholders and will continue to communicate the latest available information.”
Join our WhatsApp ChannelThe declaration follows the company’s suspension of LNG production on Monday, after Iranian drone attacks targeted two of its major production hubs Ras Laffan Industrial City, 80 kilometres north of Doha, and Mesaieed Industrial City, 40 kilometres south of the capital.
Qatar’s Defense Ministry reported that since last weekend, 101 ballistic missiles, three cruise missiles, and 39 suicide drones had been launched toward its airspace amid rising regional tensions.
A force majeure clause allows companies to temporarily suspend contractual obligations without penalties in the event of extraordinary incidents. QatarEnergy did not specify how long production would remain suspended.
Qatar is the world’s largest LNG exporter, alongside the United States, Australia, and Russia. The country shares the North Field, the world’s largest natural gas reservoir, with Iran. QatarEnergy estimates the field holds roughly 10 percent of global natural gas reserves.
The company also announced a halt to some downstream production of urea, polymers, methanol, aluminium, and other products. In recent years, QatarEnergy has signed long-term LNG agreements with major international buyers, including France’s Total, Britain’s Shell, India’s Petronet, China’s Sinopec, and Italy’s Eni, a leading European energy company that imports Qatari LNG to supply Italy and other parts of Europe.
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Expert Analysis: Supply Shock or Contract Collapse?
Economic analyst Anslem described QatarEnergy’s force majeure declaration as more than a supply disruption.
“Three words that mean: we cannot deliver, and legally, we do not have to. This is no longer a supply disruption. This is a contract collapse,” Anslem said.
He explained that force majeure formally voids contracts for affected buyers, leaving LNG supplies unavailable with no legal recourse. Asia, the largest recipient of Qatari LNG, is particularly exposed:
- China relies on Qatar for 30% of its LNG imports.
- India imports 42–52% from Qatar.
- South Korea 14–19%.
- Taiwan 25%.
Anslem highlighted immediate consequences: Asian benchmark LNG prices jumped 39% on the day production stopped, and Indian companies have already cut gas supplies to industry by 10–30%. Factories across Asia are operating at reduced capacity, a ripple effect from attacks on Ras Laffan.
Restarting liquefaction trains after a full cold shutdown takes a minimum of four weeks to reach full production, assuming no further attacks or operational delays. Anslem warned that the situation remains highly uncertain:
“The war is still running. There is no security guarantee. There is no restart timeline. There is no floor. Every LNG contract in Asia just became a spot market problem. Every spot market problem just became an inflation problem. Every inflation problem just became a central bank problem.”
The disruption illustrates how regional conflict can instantly affect global energy markets, industrial output, and household energy costs across continents.
QatarEnergy emphasized it will continue updating stakeholders as the situation develops, while buyers and markets brace for ongoing uncertainty.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
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