QatarEnergy Extends Force Majeure, Cancels More LNG Cargoes to Edison
QatarEnergy's LNG Supply Disruptions Impact Italian Utility Edison
By Francesca Landini
Extension of Force Majeure and Additional Cargo Cancellations
MILAN, May 5 (Reuters) - QatarEnergy has notified its biggest Italian customer, Edison, that it would cancel two additional liquefied natural gas (LNG) cargoes, extending force majeure to early July, the Italian utility said on Tuesday.
Edison, a unit of French energy group EDF, said in a statement that QatarEnergy would not deliver the two cargoes, on top of the 10 that have been cancelled since the start of the U.S.-Israeli war on Iran.
Impact of Regional Conflict on LNG Exports
Iranian attacks have knocked out 17% of Qatar's LNG export capacity, threatening supplies to Europe and Asia, QatarEnergy's CEO and state minister for energy affairs told Reuters in March.
Implications for Edison's Gas Supply and Mitigation Measures
Reduction in Contracted Volumes
Based on the information received so far, Edison now expects a reduction in future deliveries from QatarEnergy of around one third of the annual contracted volumes, before taking into account any potential mitigation actions, the utility said.
The Italian company has a long-term contract with QatarEnergy worth 6.4 billion cubic metres (bcm) of gas per year, or 10% of Italy's total annual gas consumption.
Mitigation Actions and Portfolio Management
"Edison confirms that it does not expect any impact on its end customers, thanks to the mitigation actions
undertaken and the ongoing portfolio management activities already in place," it said.
Eight LNG cargoes that were cancelled have been already replaced, corresponding to approximately 1 bcm of gas, it added.
Broader Impacts on EDF and Stake Sale Decisions
French utility EDF has pushed back any decision on the sale of a stake in Edison as the war in Iran has disrupted LNG supplies from Qatar that Edison imports, four people with knowledge of the matter told Reuters last week.
Reporting and Editorial Credits
(Reporting by Francesca Landini, editing by Giulia Segreti; Editing by David Gregorio)
