"The ecosystem has imploded": Shell and Total declare force majeure on LNG supplies from Qatar

Liquefied natural gas supplier Shell has declared force majeure (a notice that provides for the release of the company from liability for failure to fulfill its contractual obligations) to its customers across Asia following the shutdown in Qatar amid hostilities of the LNG complex with a capacity of 77 million tons per year. This was reported by Reuters sources and confirmed by Bloomberg interlocutors.

Reuters' sources said other Qatari LNG buyers, including TotalEnergies and some Asian companies, had received force majeure notices from QatarEnergy and told customers they would not be able to supply them with Qatari gas until the Qatar LNG complex resumes operations. Another Reuters source close to TotalEnergies said the French oil and gas company had not declared force majeure. Shell and TotalEnergies did not officially comment on the situation.

Analysts estimate that Shell receives about 6.8 million tons of Qatari LNG a year, while TotalEnergies receives about 5.2 million tons, which it then sells to customers around the world, Reuters noted.

The situation indicates that energy supply disruptions are now affecting not only companies that have direct contracts with Qatar, Bloomberg notes. "An energy ecosystem that was in a delicate balance has suddenly erupted, and many parties - whether exporters or importers - have been hit hard," Bloomberg quoted Tim Partridge, head of trading at LG Energy Group, as saying.

It could take "weeks to months" to restore supplies even if the conflict in the Middle East ended today, Qatar's Energy Minister Saad al-Qaabi told the Financial Times newspaper last week. Reuters sources added that liquefied natural gas supplies are not expected to be affected in March, but disruptions could begin in April.

Shares of Shell are rising by 2.28% in trading on March 11, although at moments they fell to the level of the previous closing, losing all growth. Since the beginning of the escalation of the conflict in the Middle East, they have added 4%. TotalEnergies also experienced a jump during the trading session, almost completely offsetting their growth on March 11, but at the time of publication they are in the plus by 1.18%; the company's share price is almost unchanged since February 28.

This article was AI-translated and verified by a human editor