LNG Capacity Hit as Qatar Attacks Remove 17% of Supply

Market Update:

‍

• NBP traded bullish on Thursday following the overnight drone strikes on Qatar’s LNG facility.
• QatarEnergy CEO and state minister for energy affairs Saad al-Kaabi said in a Reuters interview yesterday that the Iranian attacks had taken 17% of Qatar’s LNG export capacity offline.
• He confirmed that two of Qatar’s 14 LNG trains and one of its two gas to liquids facilities were damaged in the strikes. The outages are expected to remove around 12.8mn t/yr of LNG for a period of three to five years.
• Prices later retreated lower as the damage was assessed to be lower than earlier expected.
• Brent Crude oil is around $110.5/bbl, up on the day by $1.8/bbl, having previously been trading lower.
• With the attacks on the energy infrastructure raising the severity of the energy situation, Britain, Canada, France, Germany, Italy, the Netherlands and Japan issued a joint statement expressing "our readiness to contribute to appropriate efforts to ensure safe passage through the Strait (of Hormuz)"

‍

‍

‍

NATURAL GAS:

‍

European energy markets have experienced a significant amount of volatility at the back end of this week with the Iranian strikes at Ras Laffan on Wednesday night being the main driver. Following the strikes, Trump posted on social media that Iran must not attack any of the Qatari energy facilities or they would face attacks on their own South Pars gas field.
‍

Yesterday Qatar Energy announced that 17% of the LNG capacity of the country would be wiped out for 3-5 years following the attacks with LNG trains as well as gas to liquid facilities taking damage. This comes with LNG already a significant talking point in the market and supply set to become tighter following the announcement. Europe, who rely heavily on LNG, following Russia’s invasion of Ukraine may find it harder to fill storages in the summer which is one contributing factor as to why the Sum/Win spreads have turned positive for both 2026 and 2027.
‍

Friday evenings have recently become a key night for geopolitical developments with Trump making announcements post market close. Tonight may see a similar story with no definitive end in sight for the conflict and pressure building on the administration facing rising energy costs.
‍

Away from geopolitics, Norwegian flows to Europe remain down ahead of the start of the summer maintenance period in April despite that the UK system is only slightly short with warmer temperatures in NW Europe keeping demand below seasonal normal.

‍

ELECTRICITY:
‍

Power prices have not been immune to the gap upwards in the markets overnight. The front month UK Baseload contract is trading close to £130/MWh this morning with the German Baseload Apr-26 contract at €103.75/MWh. The Sum-26/Win-26 UK baseload power spread is almost flat, at close to £120/MWh for both contracts.

EUA prices have seen a move down this morning following the hike in gas prices trading to close to €63.60 at the time of writing having traded over €90 at the start of the year.

Wind speeds in NW Europe are generally weak over the next few days but expected to prick up quickly into next week adding some good renewable generation to the mix.  

Oil prices have gapped up as well this morning with Brent over $115/barrel at the time of writing following strikes in the Middle East. There are reports of Kuwaiti facilities being damaged by strikes.

‍

‍

Latest Price:
‍

‍

Latest Gas & Power Annual Chart:
‍

‍

‍