Industry sources said on Wednesday that Shell has declared force majeure on liquefied natural gas (LNG) cargoes it purchases from QatarEnergy and supplies to its clients worldwide. The step follows QatarEnergy’s own declaration of force majeure after it halted production at its 77 million tonnes per annum (mtpa) facility last week.
Shell did not provide a comment when asked, according to those sources. The move by Shell comes amid a broader wave of notices tied to the Qatari production outage.
Sources added that several other buyers of Qatari LNG - including TotalEnergies and a number of Asian companies - have received force majeure notices from QatarEnergy. Some of these buyers have informed their customers that they will not be selling Qatari-sourced LNG for as long as the facilities remain shut, the sources said. A person close to TotalEnergies said the French energy major itself has not issued a force majeure notice.
Both Shell and TotalEnergies are long-term partners with QatarEnergy and are stakeholders in the North Field expansion project, an initiative designed to increase Qatari production capacity by 2027. Analysts cited by industry participants estimate Shell’s offtake from Qatari LNG at about 6.8 mtpa, with TotalEnergies offtake around 5.2 mtpa.
Qatari Energy Minister Saad al-Kaabi said last week that it could take "weeks to months" before deliveries return to normal even if hostilities were to end immediately, a remark the sources highlighted as framing the expected recovery timeline. Separately, sources said that the force majeure notices circulated last week indicated March deliveries would not be affected, with the disruption beginning to be felt from April.
Summary
Shell has invoked force majeure on LNG cargoes it buys from QatarEnergy and resells to customers globally after a production halt at Qatar’s 77 mtpa facility. Other purchasers have also received force majeure notices; some have told customers they will not supply Qatari LNG while the plant is offline. Officials indicated recovery could take weeks to months, and notices suggest March shipments are intact while effects start in April.
Key points
- Shell declared force majeure on Qatari LNG cargoes it purchases and sells to clients, according to industry sources.
- Other buyers, including TotalEnergies and several Asian companies, have received notices and in some cases told customers they will not supply Qatari LNG while facilities remain closed.
- The North Field expansion partners include Shell and TotalEnergies; estimated offtakes are about 6.8 mtpa for Shell and 5.2 mtpa for TotalEnergies.
Risks and uncertainties
- Duration of the Qatar facility shutdown is unclear - officials have said recovery could take "weeks to months", leaving timelines uncertain for energy markets and downstream buyers.
- How broadly force majeure notices will affect global LNG contracts beyond March is uncertain; initial notices indicate March shipments may be unaffected but impacts could begin in April.
- Responses from major purchasers vary - some have not declared force majeure themselves, creating uncertainty about the contractual and commercial handling of redirected or curtailed volumes.