Investigators in Qatar are seeking the cause of a mechanical failure that has halted nearly one third of the country's liquefied natural gas (LNG) production. The Qatargas 1 plant has been shut down since Jan 8 due to the problem, an official of Qatargas, the LNG unit of state-owned Qatar Petroleum, told Associated Press on condition of anonymity. He declined to indicate when production would resume. "We have to take out time to determine what are the root causes. We're waiting for the result of this investigation. It's important for us to be prudent."
The closure comes at an especially awkward time for Qatar's European customers. The continent has been left short of gas for much of the past two weeks, as Russia shut off pipeline supplies through Ukraine over a contract dispute with the gas transit country. Analysts had predicted that Europe would seek to import extra LNG cargoes to offset the shortfall. Russia supplies about a quarter of Europe's gas, with 80 per cent of that volume passing through Ukraine.
The Qatargas plant, operated by a group of companies including Qatar Petroleum, the US oil and gas company, ExxonMobil, and the French energy group, Total, has an annual LNG production capacity of 10 million tonnes. Much of the fuel shipped from the plant is destined for Spain and Japan. In addition to further straining Europe's gas situation at a critical time, the shutdown could eventually affect Asia's tight LNG market.
"Most of the gas in the world goes through pipelines, so in that sense it's small. But if you look at it in terms of LNG, it's quite big," Serene Gardiner, an energy analyst at Standard Chartered Bank in Dubai, said of the plant stoppage. Qatar is the biggest global exporter of LNG, producing the gas from a massive offshore gasfield that is the world's largest. It plans to more than double its annual production capacity to 77 million tonnes in 2012 from about 31 million tonnes currently.