Shell says Qatar LNG repairs could take until Q1 2027

Shell has indicated that repairs to Qatar’s liquefied natural gas (LNG) production facilities could extend until the first quarter of 2027, following damage caused by missile strikes during the ongoing Middle East conflict. The company’s latest update highlights the prolonged impact of the disruptions on its operations, despite a recent easing in some areas. The damage occurred during heightened tensions between Israel and Iran, which escalated into broader regional conflicts involving multiple parties. QatarEnergy, the state-owned energy company, suspended production across its LNG facilities on March 2 and declared force majeure, citing external factors beyond its control. This decision led to a sharp decline in Shell’s Integrated Gas output, falling by 31 percent compared to the previous quarter. The affected units include parts of the Pearl gas-to-liquids plant, where sections were hit by missile strikes. According to Shell’s chief financial officer, Sinead Gorman, these damaged sections are expected to return to service by early 2027, though unaffected units might resume operations sooner if shipping lanes remain open. Shell holds a 30 percent stake in QatarEnergy’s fourth expansion train at Ras Laffan Industrial City, contributing approximately 2.4 million tonnes annually to its equity production. Notably, this facility has continued operating despite the disruptions, providing some stability to Shell’s overall output. However, the company’s third-quarter guidance still assumes zero output from Qatar, underscoring the uncertainty surrounding the full restoration of operations. Shell’s CEO, Wael Sawan, described the situation as a “short-term event rather than a structural one,” suggesting that the current challenges are temporary and not indicative of long-term operational risks. On Thursday, the situation showed slight improvement when the Al Areesh, a QatarEnergy-linked LNG carrier, successfully navigated the Strait of Hormuz and entered the Gulf of Oman. This marked the first such transit since the Al Rekayyat, another vessel, was struck in the waterway three weeks prior. While this development signals progress, it does not yet indicate a complete resolution of the issues affecting Qatar’s LNG exports. Despite the operational setbacks, Shell’s financial performance remained robust. In the second quarter, the company reported adjusted earnings of $9.8 billion, nearly doubling the figure from the same period the previous year. This achievement surpassed analysts' expectations of $8.7 billion. The improved results reflect strong performance in trading and refining activities, which offset the losses incurred due to reduced gas production. These gains highlight the resilience of Shell’s broader business model amid geopolitical volatility. As the situation continues to evolve, the focus will remain on the pace of repairs and the eventual resumption of full-scale LNG production from Qatar. With the potential timeline stretching into early 2027, stakeholders will be watching closely for further updates on the status of the damaged infrastructure and the implications for global energy markets.