Poland’s Orlen Becomes First Buyer to Cancel Long-Term Qatar LNG Deal

Polish state-owned energy firm Orlen has become the first long-term client of QatarEnergy to cancel an LNG supply contract with the Qatari company amid the continued force majeure on exports.

In a regulatory filing from late Tuesday, the Polish firm noted that QatarEnergy has become unable to meet its contractual obligations to supply Orlen with 1 million tons of superchilled gas annually. The contract was signed in 2009, The National noted in a report on the news, and deliveries began in 2016, with the term of the contract until 2034.

At the end of last month, QatarEnergy extended its force majeure, in force since spring, to the end of the year as tanker travel in the Strait of Hormuz remains a highly risky endeavor, with 37 attacks on tankers by Iranian forces in October—a monthly record since March.

At the same time, Kpler reported earlier this week that exports of liquefied natural gas via the Strait of Hormuz last month reached the highest total since February, at 31 tankers, compared with 23 in September.

What is perhaps more impressive is that most of these cargoes were loaded from Qatar’s Ras Laffan hub, despite it still being under force majeure. In two cases, per Kpler, LNG cargoes loaded at Ras Laffan were then transferred to other tankers once the original vessels had cleared the Strait of Hormuz.

Even with this rebound in exports, Qatar’s total in liquefied gas exports remains far below pre-war levels, at 2.7 million tons last month, versus close to 6.2 million tons in February.

Iranian attacks on U.S. allies in the Gulf took out 17% of Qatar’s export capacity and caused an estimated loss of $20 billion in annual revenue, QatarEnergy said in March. Since then, the company has been scrambling to find ways to service its contracts, despite the force majeure, including by contracting significant volumes from U.S. Cheniere Energy.

By Irina Slav for Oilprice.com

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