The resumption of Ras Laffan’s liquefied natural gas (LNG) and helium production is “more important” than the reopening of the Strait of Hormuz, according to Air Liquide CEO Francois Jackow.
Speaking on today’s call, he said the reopening of the key plant would provide “immediate relief” since it can export ISO containers by road.
“This is much more critical than the strait,” he said. “We have done that in the past [shipping containers by road] and we are still doing it.”
gasworld analysis has found container handling and distribution is in the crisis. Pressures on finding new distribution routes will intensify the longer the strait, which handles 20% of global LNG, is out of action.
While helium accounts for only 3% of Air Liquide’s total sales, it is vital to the multinational group as healthcare and electronics are two key sectors driving growth.
“Most of the helium contractual volumes for us are in electronics and the large industrial merchant customers,” said Jackow.
With Qatar stopping LNG production, and 30% of helium sourcing being offline, Jackow said the company was seeing disruption in the supply chain, and the emergence of a globally short market. “And the market is getting shorter with news that there has been ,” he said.
He added that it wasn’t the first time helium has faced an imbalanced situation between supply and demand. “But given the potential magnitude, we have requested temporary relief from our supply contracts in order to allocate volumes based on application criticality … these are temporary measures and the contracts are still in place.”
© Air Liquide
Emilie Mouren-Renouard, member of the executive committee and CEO of the Europe Industries Hub, said Air Liquide has been “proactive” in increasing prices in anticipation of cost increases resulting from the Middle East crisis and inflationary pressures. Jackow added it is passing through additional costs from logistics and liquefaction of materials.
Both directors stressed safety remains its priority. Air Liquide operates across five Middle East countries, supported by 500 staff, and all its plants are running with the exception of Kuwait.
“Overall we are working with customers to minimise the impact,” he said. “We have strong bases. We think there are positive trends but things are unfolding by the hour [and] you have to look and anticipate some of the ripple effects.”
