Korean Media: Qatar Announces Force Majeure on Long-term LNG Contracts with South Korea and Others
On the 24th, Qatar Energy announced that certain long-term LNG supply contracts with South Korea, China, and other countries have encountered force majeure. The declaration of force majeure refers to informing relevant parties when an uncontrollable event—such as war or natural disasters—prevents normal contract performance, thereby avoiding liability for damages or legal consequences.
On the same day, according to Reuters, Qatar Energy stated that countries affected by the force majeure declaration include South Korea, China, Italy, Belgium, and others.
The background behind this force majeure announcement is the large-scale damage inflicted on Qatar’s Ras Laffan LNG production hub between the 18th and 19th, following an air strike attributed to Iran.
On the 19th, Qatar Energy’s CEO, Saad Al-Kaabi, told Reuters that Iran’s attack has paralyzed 17% of Qatar’s LNG export capacity, with recovery potentially taking 3 to 5 years. Two out of 14 LNG production lines were directly damaged, leading to an estimated annual reduction in LNG output of 12.8 million tons.
After the Iranian attack, Al-Kaabi had previously stated that long-term LNG supply contracts with Italy, Belgium, South Korea, and China could face up to five years of force majeure—now, this concern has become reality. He added: “Since these are long-term contracts, we had no choice but to declare force majeure,” and “We already made a previous declaration, but that time was shorter. This time, we are declaring it based on the actual duration of the supply disruption.”
South Korea is one of the largest importers of LNG from Qatar, importing approximately 9 to 10 million tons annually. The long-term contract between South Korea and Qatar amounts to 6.1 million tons per year. However, according to Korea Gas Corporation, although diversification of the LNG supply network has reduced dependence on Qatar to below 20%, if imports from Qatar are interrupted for five years due to force majeure, both industrial sectors and ordinary households will be affected—particularly in terms of rising gas bills.
In addition to LNG, exports of by-products such as condensate (down 24%), LPG (down 13%), and helium (down 14%) will also decline, causing widespread instability in global petrochemical and high-tech industries. According to Reuters, “The impact ranges from LPG used in Indian restaurants to helium-dependent Korean semiconductor companies—reduced supply will have far-reaching consequences.”
Under these circumstances, public concerns persist: as long as there remains a threat of further Iranian attacks and ongoing regional military conflicts, physical repairs cannot proceed. In response, Al-Kaabi said: “To restart production, the first priority must be to stop hostile actions.”
Source: Chosun Ilbo
Original article: toutiao.com/article/1860598959781257/
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