Shell Announces Force Major on LNG Contracts from Qatar | US-Israel war over Iran news

Qatar announced last week that it would suspend production at one facility and declare force majeure on LNG shipments.

Shell, the world’s largest liquefied natural gas (LNG) trader, has announced force majeure on LNG cargoes it buys from Qatar Energy and sells to its customers worldwide, Reuters news agency reported, citing three unnamed sources.

Qatar, the world’s second-largest exporter of LNG, announced last week that it would suspend production at a facility producing 77 million tonnes per annum (MTPA) and declare force majeure on LNG shipments.

Shell declined to comment Wednesday.

Other Qatari LNG buyers, including Total Energies and some Asian companies, have received coercive notices from Qatar and told customers they will not sell Qatari LNG as long as the facilities remain closed, two other sources said.

Bloomberg News reported on Wednesday that Omani trading house OQ has announced forced labor for its customers in Bangladesh due to the suspension of Qatari supplies, a sign that such announcements are extending beyond companies that have direct contracts with Qatar Energy.

Total Energies has not declared force majeure, a term used to describe events outside a company’s control, such as a natural disaster, that usually releases it from contractual obligations without penalty, a person familiar with the matter told Reuters.

Both Shell and Total Energies have long-standing partnerships with Qatar Energy and are partners in the company’s massive North Field Expansion Project, which aims to increase production capacity by 2027.

Analysts estimate Shell will take 6.8 mtpa of Qatari LNG while TotalEnergies will take 5.2 mtpa.

Qatari Energy Minister Saad al-Kaabi told the Financial Times last week that even if the war ended today, it would take “weeks to months” to return to normal delivery. Qatar Energy announced force majeure on LNG shipments on Wednesday.

Sources told Reuters last week that the force majeure notices sent to clients will not affect LNG deliveries in March and will not continue until April.