Qatar’s state-owned QatarEnergy has extended by several weeks its force majeure on LNG deliveries to customers as the LNG flows at the Strait of Hormuz remained blocked despite increased oil flows.
QatarEnergy has notified buyers in Pakistan and Bangladesh this week that LNG cargo cancellations would continue through October, traders with knowledge of the situation told Bloomberg on Friday.
Some previously planned deliveries to Europe under long-term deals have also been cancelled beyond September, with Edison of Italy saying the force majeure and cargo cancellations were extended into early November.
At the end of July, Edison said that QatarEnergy canceled an additional three LNG cargoes with the force majeure period extended by September.
As of July 28, a total of 24 LNG cargoes for delivery to Edison were subject to force majeure since April, representing a total volume of approximately 3 billion cubic meters of natural gas.
Now this force majeure period has been extended beyond September as LNG traffic at the Strait of Hormuz remains at a standstill, even though oil flows are estimated to have rebounded in recent weeks.
However, unlike crude oil, LNG cannot be shuttle-shipped through Hormuz and then reloaded via a ship-to-ship (STS) transfer as Persian Gulf producers, including Qatar, have been doing in recent months to ship oil to customers with alternative methods and routes.
Six months since the Iran war crippled Qatar’s LNG exports via the Strait of Hormuz, the world’s second-largest liquefied natural gas exporter has lost $24 billion in sales as exports tumbled by as much as 96%, Reuters calculations showed earlier this week.
The number of LNG cargoes that Qatar has managed to export crashed to just 18, down from 509 cargoes shipped from Qatar in the same period of last year, per data from data intelligence firm ICIS cited by Reuters.
By Charles Kennedy for Oilprice.com
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