QatarEnergy Extends Force Majeure on LNG Deliveries to Edison

QatarEnergy has extended a force majeure clause with Italy's Edison, further delaying liquefied natural gas (LNG) cargo deliveries. This action follows QatarEnergy's initial declaration of force majeure on its LNG buyers in March, after its facilities were hit during a drone attack. Edison, a key customer for the Qatari state giant, has received an update on the "ongoing force majeure affecting LNG supplies delivered to the Adriatic LNG terminal." The notice covers an additional two LNG cargoes scheduled for delivery to Italy up to early July, on top of the ten cargoes already covered by previous communications.

Contractual Context and Supply Disruptions

Edison has a long-term contract with QatarEnergy for the supply of 6.4 billion cubic metres per annum (4.7 million tonnes per annum) of gas to Italy. Signed in 2009, the contract has a total duration of 25 years, with previous deliveries from Qatar dating back to the end of March 2026. The Strait of Hormuz remains disrupted since the onset of the US-Israel war on Iran in late February, impacting more than 20% of the world's oil and LNG supplies. Edison stated that to date, eight delayed Qatari LNG cargoes have been replaced, corresponding to approximately 1 Bcm (735,000 tonnes).

Impact on Customers and Future Outlook

Edison stated that it does not expect any impact on its end customers due to the extension of the force majeure clause, considering the mitigation actions taken by the company and its portfolio management activities. The impact of Qatar's force majeure on timing and volumes will depend on several factors, including how regional conflicts evolve and their effect on operations, safety, production capacity, and local shipping logistics. According to its communication with QatarEnergy, Edison considers a reduction in future deliveries from Qatar at around one third of the annual contracted volumes. Qatar is one of the three largest LNG exporters globally, alongside the US and Australia, and several other customers have been impacted due to supply disruptions. For instance, India's Petronet LNG expects to receive its full contracted amount of LNG from Qatar once the geopolitical situation in the Middle East stabilises, despite supplies being disrupted since March.