Qatar has been forced to halt LNG supply to its customers in Europe and Japan as one of its major plants at Qatargas developed a technical snag.
Qatargas which recently announced that it will expand its capacity four times in next three years has, however, declined to confirm reports that it has declared 'Force majuere', a legal clause which liberates companies from contractual obligations.
Sources said the problem emerged after a Qatargas run plant –Qatargas 1 – developed a snag.
The snag appeared on January 8, but then it is in the last 72 hours wherein exports have been affected. While local Qatari media has reported that exports have been halted to Spain's Gas Natural, other sources said that LNG exports to Japan have also been affected.
Authorities at Qatargas have declined to comment on the matter.
Qatargas 1 consists of three onshore LNG trains with a total capacity of 10 million tonnes per year.
Qatargas is a joint venture between Qatar Petroleum, Exxon Mobil, France's Total and Japan's Mitsui and Marubeni.
It is in fact when the importers began to look for alternative arrangements that the news emanated.
Japan's Chubu Electric said recently that the Qatargas has declared a 'Force majeure' after halting LNG output at the Qatargas 1 plant because of a technical problem. "We are trying to find solutions in cooperation with Qatargas. We plan to solve this as soon as possible," a Chubu spokesman said adding that volumes involved are very high. Chubu could resort to using its oil-fired plants.
Spain's Gas Natural has also announced that it will resort to other sources to meet its energy needs.
Gas Natural distributes gas in Spain, Italy and Lain America.
Qatar, the world's largest exporter of LNG, has two state-run companies in LNG exports – Qatargas and Rasgas. Qatar has a LNG production capacity of 30.7 million tonnes per annum.
Japan, South Korea, the EU and India lead the list of LNG importers.