Qatar said Monday it halted liquefied natural gas production due to attacks by Iran on two key operating facilities, as the Islamic Republic widened retaliatory strikes to target regional energy infrastructure of its Persian Gulf neighbors.
Qatar is one of the world’s largest providers of LNG. About 20% of global LNG exports come from the Gulf, primarily Qatar, and are shipped through the Strait of Hormuz, according to energy consulting firm Kpler.
Qatar’s Defense Ministry said earlier that two drones launched from Iran had struck facilities in the country, although there were no casualties. QatarEnergy, a state-owned energy company, said the attack hit its facilities at Ras Laffan Industrial City and Mesaieed Industrial City.
European natural gas futures soared after the shutdown. U.K. natural gas spiked about 50%, while Dutch futures jumped more than 45%. Shares of U.S. LNG exporters Cheniere Energy and Venture Global jumped about 6% and more than 14%, respectively.
Iran launched missiles at U.S. allies across the Gulf over the weekend in retaliation for massive strikes by the U.S. and Israel that killed the Islamic Republic’s supreme leader, Ayatollah Ali Khamenei. Saudi Aramco’s Ras Tanura refinery was attacked by a drone, an industry source told CNBC. The refinery has been closed as a precautionary measure, the source said.
LNG is a type of natural gas that is super cooled at minus 260 degrees Fahrenheit into a liquid state and loaded on tankers for transport around the world. Natural gas is used primarily for electricity production.
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