Disrupted LNG Production and Global Helium Supply Risks

The latest attacks by Iran on Qatar facilities have damaged infrastructure that accounts for 17% of QatarEnergy’s liquefied natural gas (LNG) export capability, Reuters reports. The attacks will also cut helium output by 14%, said QatarEnergy.

QatarEnergy CEO Saad al-Kaabi told the news agency today, “I never in my wildest ‌dreams ⁠would have thought that Qatar would be, Qatar and the region, in such an ⁠attack, especially from a brotherly Muslim country in the month of ⁠Ramadan, attacking us in this way.”

That cut in production capability equates to an estimated $20bn in lost revenues each year, including the value of the lost helium output plus some other chemicals. It will threaten supplies to Europe and Asia, said Kaabi.

Two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the unprecedented strikes. The repairs required would sideline 12.8 million tonnes per year of LNG for three to five years, he said.

It now looked like state-owned QatarEnergy might have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea, and China due to the damaged trains, Kaabi said.

“We already declared, but that was a shorter term. Now it’s whatever the period is,” he said.

US oil major ExxonMobil is a partner in the damaged LNG facilities. The Texas-based firm holds a 34% stake in LNG train S4 and a 30% stake in train S6, al-Kaabi said.

The reckoning looks like this currently. Qatar’s exports of condensate will drop by around 24%, while liquefied petroleum gas (LPG) will fall 13%. Helium output will fall 14%, as mentioned, and naphtha and sulphur will both drop by 6%.

The damaged LNG trains cost approximately $26bn to build, Kaabi said.

QatarEnergy had already declared force majeure on its entire output of LNG after earlier attacks on its Ras Laffan production hub.

“For production to restart, first we need hostilities to cease,” QatarEnergy’s CEO said.

Phil Kornbluth, of Kornbluth Helium Consulting, said the helium reduction represents around 5% of global supply.

“That is certainly significant, but there would be enough surplus to offset that loss when the rest of Ras Laffan comes back online. Of course, the missiles are still flying around, so there is risk that the situation could still deteriorate further from here,” he said.

Helium shortages are becoming more likely as global supply chains feel the pinch, and supply chain pressures are likely to be felt most acutely in Asia, where semiconductor suppliers are in a race to keep up with demand for data centres and AI. Countries such as Singapore and Korea are already adjusting to the new world order.

https://www.gasworld.com/story/damage-to-qatar-lng-trains-will-cut-helium-output-by-14-for-many-years/2174708.article/