Gulf LNG Exports Drop 96% Amid Hormuz Blockade

Qatar exported just 18 LNG cargoes during the first six months of the Iran war. This represents a 96% decline from the 509 cargoes shipped in the same period last year. The drop reflects the continued blockade of the Strait of Hormuz.

Operators are using ship-to-ship transfers to move gas to buyers. Three recent cargoes from Qatar and the UAE used this method. Each transfer added more than $1 million to costs and up to 35 hours to transit time.

Emergency Transfers Add Significant Costs

Ship-to-ship transfers are rare in the LNG trade. Liquid natural gas must stay at minus 162 degrees Celsius to remain liquid. This requires specialist cryogenic equipment, fenders, and tugboats on both vessels.

Bogdan Ratiu of LNG Synergy described recent operations as emergency measures. He noted that companies have no choice in certain situations. The process takes roughly 30 to 35 hours per cargo.

Delays cause boil-off, where gas evaporates naturally. Older ships have fewer options to recover this gas. Keeping LNG on board ties up vessels and increases financial losses.

Damaged Vessels Drive Transfer Use

Two of the three recent transfers involved ships with prior incidents. The Al Rekayyat was struck by a projectile near Hormuz in July. It transferred its cargo to the Tembek off the UAE coast before delivery to India.

The GasLog Shanghai was involved in an incident while leaving the strait. It moved its cargo to the GasLog Savannah off Oman. A third vessel, the Mraweh, transferred LNG to the LNG Enugu for delivery to Japan.

Ras Laffan Output Plummets Sharply

Ras Laffan is the world’s largest LNG export complex. It normally loads 140 to 150 cargoes per month. All output must transit the Strait of Hormuz to reach international markets.

No pipeline or alternative route exists for this gas. The International Energy Agency reports a 35 billion cubic meter drop in Gulf loadings from March to June. Qatar is estimated to have lost around $24 billion in sales.