Japan’s engineering giant Chiyoda Corporation is weighing resuming work on a massive expansion at Qatar’s LNG export site at Ras Laffan after the U.S. and Iran agreed to a two-week ceasefire.
Chiyoda is one of the contractors working on the North Field East (NFE) LNG project expansion, one of Qatar’s huge projects to boost its export capacity over the coming years.
However, the war in the Middle East and Iranian missile strikes at Ras Laffan last month halted production and exports, as well as expansion works.
The ceasefire has brought cautious optimism among the contractors of Qatar’s expansion projects that they could return personnel to the sites.
“Based on the situation so far, we are considering the resumption of on-site work for the LNG project in Qatar,” a spokesperson for Chiyoda said on Wednesday, as carried by Bloomberg.
The war and the Iranian strikes have delayed the timeline for completion of the Qatari LNG expansion projects.
Chiyoda’s Engineering, Procurement and Construction (EPC) work at the North Field East was originally planned to be completed in 2027.
This may now slip months and even years as QatarEnergy, the state firm, last month confirmed the damage from the strikes is “extensive”.
QatarEnergy also expects the damage to the Ras Laffan LNG complex, the world’s single largest LNG-producing facility, to cost it about $20 billion per year in lost revenue and to take up to five years to repair.
“The damage sustained by the LNG facilities will take between three to five years to repair,” said QatarEnergy President and CEO, Saad Sherida Al-Kaabi, who is also Qatar’s Minister of State for Energy Affairs.
“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 extended outage in Qatar upends global LNG and gas markets as it risks tightening global supply, raising prices, and delaying capacity growth through 2028, Wood Mackenzie reckons.
By Tsvetana Paraskova for Oilprice.com
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