Qatar: Ras Laffan LNG hit; $20B annual loss, repairs up to 5 years

QatarEnergy reported that Iranian missile strikes earlier this week damaged LNG production Trains 4 and 6 at Ras Laffan Industrial City, removing roughly 12.8 million tonnes per annum of capacity from service, about 17% of Qatar’s exports.

The company estimated the damage would cost about $20 billion a year in lost revenue and that repairs would take three to five years. Saad Sherida Al‑Kaabi, QatarEnergy president and CEO and Qatar’s minister of state for energy affairs, warned:

“The damage sustained by the LNG facilities will take between three to five years to repair.”

QatarEnergy identified Trains 4 and 6 as the units affected and said supply to buyers in Europe and Asia will be hit over the coming years. Al‑Kaabi added:

“The impact is on China, South Korea, Italy and Belgium. This means that we will be compelled to declare force majeure for up to five years on some long-term LNG contracts.”

The attack also affected the Pearl GTL gas-to-liquids plant operated under a production-sharing agreement with an international partner. QatarEnergy reported that one of Pearl GTL’s two trains sustained damage and is expected to be offline for at least one year while assessments and repairs proceed.

Global benchmark gas prices in Europe, the UK and Asia rose after QatarEnergy confirmed the extent of the damage as traders priced a longer supply shortfall. Market participants had been forecasting a period of weaker demand and higher supply before the strikes.

QatarEnergy said repair work will require detailed inspections, replacement of critical components, extensive safety testing, procurement of parts, contractor mobilization and regulatory approvals. The company has not released a schedule of milestones beyond the three- to five-year estimate and the minimum one-year outage for the Pearl GTL train.

Ras Laffan Industrial City is the center of Qatar’s LNG infrastructure. The sidelining of two trains reduces the country’s effective export capacity and requires adjustments to supply commitments and shipping plans. QatarEnergy and its partners will coordinate engineering assessments and restoration work to return the affected units to service.

As we reported earlier, Qatar's warning came as oil prices jumped — WTI reached $92.61 and Brent $94.64 — and prices have risen about 52% year-to-date. The Strait of Hormuz is effectively closed after attacks on commercial vessels and a halt to war-risk insurance, prompting Gulf producers to cut output and fill storage, with Kuwait already reducing production. US officials are preparing a $20 billion reinsurance backstop to restore insurance for Gulf shipments.