Qatar Plans Rapid LNG Production Ramp-Up Post-Hormuz Reopening

Qatar plans to quickly ramp up liquefied natural gas production to nearly full capacity within two months of the Strait of Hormuz reopening. QatarEnergy expects to reach 50% output a month after safe passage is restored, with the remaining capacity to take years to fully recover from recent damage.

Qatar is planning to rapidly boost liquefied natural gas production once the Strait of Hormuz reopens, aiming to restore most of its export capacity within two months, according to people familiar with the matter.

QatarEnergy, which operates the country’s LNG facility, has told buyers that it expects to raise output to about 50% of capacity a month after safe passage through the strait is restored, and to roughly 80% within two months, said the people, who asked not to be named as they aren’t authorized to speak with media.

Also Read: Oil and gas supplies could take months to return to normal after Iran deal, energy experts say

The remaining capacity — equivalent to two production trains — will take years to fully restore after it was damaged by Iranian missile strikes in March, they said.

QatarEnergy didn’t immediately respond to a request for comment.

Live Events

Qatar shut the world’s largest LNG facility in the first week of the war after an Iranian attack, triggering cancellations and denting the supplier’s longstanding reputation for reliability. The Ras Laffan complex, which exported almost a fifth of global supply last year, has remained largely idle for more than three months as the effective closure of Hormuz made it too difficult to ship large amounts of gas.

But Qatar has been laying the groundwork since April to allow for its rapid restart.

Also Read: Strait of Hormuz reopening to ease oil supply risks for India as US-Iran reach truce deal

QatarEnergy has been testing equipment and performing necessary maintenance, Bloomberg reported in April. Several production trains have been operating at reduced capacity, so that the plant can deliver shipments to neighbors, but also be able to increase output when necessary, the people said.

Resuming half of its output within a month is faster than what some analysts and traders had been expecting.

US President Donald Trump has repeatedly said Hormuz would be open by Friday, when an interim agreement is due to be signed with Iran in Switzerland. However, his European allies don’t share his optimism, and a senior US official has said that mines would still need to be removed. Shipowners, traders and producers have been trying to seek clarity on the situation.

The return of LNG from Qatar will help ease a global supply crunch. Despite the tentative US and Iran peace agreement, LNG prices in Europe and Asia remain elevated compared to pre-war levels. Qatar has been able to export a handful of shipments out of the Persian Gulf to buyers in Asia by masking the location of their tankers as a safety measure, but those deliveries are still far lower than normal.