Why Qatar Is Slowing Down Its Gas Production Comeback

Qatar has paused its plans to quickly increase LNG production at the Ras Laffan complex after an attack on one of its tankers in the Strait of Hormuz renewed safety concerns.

Qatar is stepping back from plans to quickly ramp up output at the world’s biggest liquefied natural gas facility after an attack on one of its tankers in the Strait of Hormuz raised fresh doubts about how safe the waterway really is.

Following Tuesday’s attack on Al Rekayyat, a LNG tanker, officials at QatarEnergy held a series of meetings, and CEO Saad Al-Kaabi made the call to halt plans for boosting production at the Ras Laffan complex, as per a report from Bloomberg which cited unnamed sources. For now, operations will run at bare minimum levels for safety, and fewer ships will be allowed to dock at the facility over the coming days.

European gas prices reacted immediately as well, climbing past €50 a megawatt hour on Thursday for the first time since the US and Iran reached their interim peace agreement last month.

The company had also stepped up loadings and called back empty tankers to prepare for higher output. Those preparations are now on hold. As the world’s second largest LNG exporter, Qatar is choosing to wait out the current tensions before pushing forward again.