Poland’s Orlen Cancels A Qatari LNG Contract

ERBIL (Kurdistan 24) - Poland’s state-owned energy company Orlen has terminated one of its two long-term liquefied natural gas contracts with QatarEnergy, becoming the first buyer known to cancel a long-term agreement with the Qatari company since the Iran war began, according to a regulatory filing late on Tuesday.

Orlen said it exercised its right to end the deal because of an “ongoing force majeure” that left QatarEnergy unable to deliver.

The oil-linked contract covered 1 million tonnes of LNG a year, was signed in 2009, began deliveries in 2016, and was due to run until 2034. It was worth about €570 million this year, according to Orlen. The contract stays in force for 60 days after the termination notice, according to Polish media reports on the filing. Orlen keeps a second Qatari contract, priced against gas quotations, which also runs until 2034 and covers up to 1 million tonnes a year. The company says its supplies are secure because of domestic production and new US LNG deals.

QatarEnergy halted LNG production on March 2 after Iranian drone attacks on facilities at Ras Laffan and Mesaieed, and declared force majeure on March 4.

Iranian missiles struck Ras Laffan on March 18 and 19, damaging two of 14 LNG trains and a gas-to-liquids plant, which QatarEnergy said took out about 17 percent of its export capacity, or 12.8 million tonnes a year.

CEO Saad al-Kaabi said repairs would take three to five years and that force majeure would apply for up to five years on some long-term contracts with buyers in Italy, Belgium, South Korea and China.

At the end of October, QatarEnergy extended its force majeure to the end of the year, as Iranian forces carried out 37 attacks on tankers in October, a monthly record since March, according to Oilprice. Most cargoes continue to load at Ras Laffan.