Qatar closes down gas liquefaction; restarting will take several weeks, say sources
Qatar declared a 'force majeure' on its gas exports Wednesday, amid the U.S. and Israeli war against Iran. Sources said that it could take at least a month to return to normal production levels.
Qatar is supplying 20% of the world's liquefied gas.
Two sources familiar with this matter have confirmed that Qatar Energy, the state energy giant, which has stopped producing gas in recent weeks, will completely shut down gas liquefaction by Wednesday. Two sources familiar with the matter said that they asked to remain anonymous because they were not permitted to speak to media.
Sources said that QE will not restart the facility until at least two weeks have passed, based on initial assessments of the situation in this region. The sources said that once the decision to restart is made, it will be another two weeks before the gas can reach its full capacity. The company did not respond when asked for comment.
Qatar exports about 20% of the world's LNG. All of these LNG exports transit the Strait of Hormuz where shipping has?ground almost to a halt due to the U.S./Israeli war against Iran and Tehran’s retaliation.
Qatar is a supplier of Europe and primarily Asian markets.?With over 80% customers in China?,?Japan?,?India?,?South Korea?, Pakistan?and other countries?in the region?.
A clause called force majeure releases parties from any liability when they fail to meet their obligations due to circumstances beyond their control.
Sources say that QE has begun contacting its clients across Asia and Europe but hasn't told them for how long they might be affected.
Gas prices in Europe and Asia have reached multi-year highs due to the increased competition for LNG cargoes between the Atlantic basin and Pacific basin.
How to shutdown and restart work
Export cargoes are unable to leave Qatar due to the shipping curtailment in the Strait of Hormuz. The liquefaction, which is the process of cooling gas down to 162 degrees Celsius and converting it into liquid form, cannot continue.
This buffer, while QE has a large storage capacity at the Ras Laffan plant (roughly 760,000 cubic metres), is not enough to support continuous production of this magnitude. Mehdy Touil said that at full rate it would only take 1.6 days to fully fill the tanks.
He said that the shutdown is done gradually, by first reducing output to minimum levels and then lowering feed-gas flow, before easing back pressure to upstream equipment to protect it.
The cooldown process is the most important step to restart. The cooldown is deliberately slow to prevent thermal shock. Touil said that trains cannot be restarted simultaneously, but must be done in sequence. Reporting by Marwa Nasrallah, London. Additional reporting by Andrew Mills, Doha; Marek Strzelecki, Warsaw; Chen Aizhu, and Emily Chow, Singapore. Shadia Nasrallah, London. Mark Potter is the editor.
(source: Reuters)
