Extensive Damage At World's Largest LNG Plant In Qatar After Iran Strike

A Qatari complex housing the world's largest liquefied natural gas export plant suffered "extensive damage" amid a sharp escalation of attacks on energy facilities across the Persian Gulf. 

The Ras Laffan Industrial City, home to the LNG plant that accounted for about a fifth of global supply before production was halted earlier this month, was hit by an Iranian missile after four others were intercepted, authorities said late Wednesday. Hours later, Abu Dhabi shut its Habshan gas facilities after they were hit by falling debris from an intercepted strike.

A subsequent attack on Ras Laffan early on Thursday led to a fire, which Qatari authorities said they were dealing with. 

The incidents mark yet another escalation in hostilities in the region and follow a string of attacks targeting oil and gas infrastructure in recent days. Crude and natural gas prices surged earlier in the day after Israel attacked Iran's giant South Pars gas field. Tehran responded with a warning that several energy sites in Qatar, Saudi Arabia and United Arab Emirates had become "legitimate targets." 

"A retaliatory attack on Ras Laffan is exactly what the global natural gas market feared the most," said Tom Marzec-Manser, Europe gas and LNG director at consultancy Wood Mackenzie Ltd. "We're yet to know which part of the industrial complex has been damaged, but either way it's going to be bullish for gas prices when the market opens on Thursday."

Brent oil futures extended gains after the attack, rising as much as 8% on Wednesday to $111.90 a barrel.

State-controlled QatarEnergy said all personnel were accounted for at its LNG facility, which had been evacuated hours earlier. Qatar's interior ministry said the fire caused by the strike was under control.

Qatar "considers this aggression a dangerous escalation and a flagrant violation of the state's sovereignty, as well as a direct threat to its national security and the stability of the region," the Ministry of Foreign Affairs said in a social media post. It later ordered Iranian military and security attaches as well as affiliate staff to leave the country within 24 hours.

The Abu Dhabi Media Office said in a post on X that no injuries were reported at Habshan. Abu Dhabi National Oil Co. operates one of the world's largest onshore gas processing facilities there, with 14 trains able to produce more than 6 billion cubic feet of gas a day, enough to supply South Korea.

The Saudi Defense Ministry also said the country had thwarted a drone attack targeting a gas facility in its eastern region. In a separate incident, shrapnel from a ballistic missile fell near a south Riyadh refinery.

Ras Laffan Industrial City covers 295 square kilometers in area (114 square miles), about one-third the size of New York City. As well as LNG processing, it's also home to other gas-related facilities, including a gas-to-liquids plant, LNG storage, and condensate splitters, as well as an oil refinery.

The site was effectively cut off from the rest of the world by the throttling of tanker traffic through the Strait of Hormuz following US and Israeli attacks on Iran. Production was halted earlier this month after an Iranian drone attack, leading QatarEnergy to declare force majeure on deliveries, throwing the global LNG market into turmoil and sending buyers scrambling for alternative supplies.

The market impact has been particularly severe in Asia and Europe, as both regions rely on imported gas for power generation. The latest attacks have raised questions about how long supply will be impacted even once the strait reopens.

"It's now hard to see Qataris coming back to the market before the middle of the year and even that is ambitious," said Ira Joseph, global fellow at the Center on Global Energy Policy at Columbia University.

Shell Plc, which has interests in some of Ras Laffan's gas and LNG infrastructure, said it's assessing any potential impact from the attack.

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