QatarEnergy halts LNG deliveries to Bangladesh until Nov

QatarEnergy extended force majeure notices on Monday until November for its Asian clients, including Bangladesh and Pakistan, according to two trading sources.

The state-owned energy company issued the extensions as the continued closure of the Strait of Hormuz blocks liquefied natural gas (LNG) shipments from the Persian Gulf. Alongside its Asian buyers, QatarEnergy notified Italian utility Edison - one of its primary European customers - that it will not deliver LNG cargoes until early December.

This postponement marks an extension of the initial force majeure notification issued in April following severe trade disruptions caused by the US-Iran war. QatarEnergy did not immediately reply to requests seeking comment on the situation.

The ongoing war with Iran has dealt a severe blow to Qatar’s economy, turning the nation into one of the crisis’s primary economic casualties as its LNG exports plummeted by 96 percent through the end of August.

While neighboring Gulf oil exporters managed to navigate around the blockaded Strait of Hormuz to secretly ship crude, Qatar exported merely 18 LNG cargoes through late August - a sharp decline from the 509 cargoes delivered during the equivalent timeframe last year, based on figures from market intelligence firm ICIS.

In an official update published on an Italian energy markets platform, Edison disclosed that QatarEnergy will cancel another six LNG cargoes, bringing total undelivered shipments under their agreement to 35.

The utility, which operates as an Italian subsidiary of France’s EDF, has replaced 23 missing cargoes thus far by turning primarily to American suppliers to offset halted Middle Eastern deliveries.

Under a 25-year long-term contract signed in 2009, Edison receives 6.4 billion cubic meters of natural gas annually from QatarEnergy, supplying around 10 percent of Italy’s total gas consumption.

With the winter heating season commencing within days, European buyers must secure alternative energy sources to refill their gas storage inventories before peak cold weather arrives. This urgent demand will intensify market competition with Asian clients for limited global gas supplies, driving international gas prices even higher.

Although Italian authorities remain confident about hitting European Union gas buffer targets, several countries - including Germany - are racing to fill their storage facilities.

Source: Reuters (adapted)