Qatar may extend its force majeure on gas supplies beyond mid-June, Italian importer Edison said on Wednesday, while predicting the gap will be plugged by U.S. supply instead of Russian gas.
Speaking in a media briefing, Edison CEO Nicola Monti and its head of gas portfolio management Fabio Dubini said the Italian group bought seven cargoes of liquefied natural gas from the United States after 10 were cancelled by QatarEnergy between April and mid-June due to the Middle East war.
Edison has a long-term contract with QatarEnergy to receive 6.4 billion cubic metres of LNG per year, around 10% of Italy’s annual consumption. The utility, Italy’s second-biggest gas importer, last month received notification from its Gulf supplier that it would not deliver 10 cargoes – equal to 1.4 billion cubic metres of gas – from April to mid-June. Attacks by Iran knocked out 17% of QatarEnergy’s LNG export capacity last month, according to its CEO.
QatarEnergy could not be immediately reached outside normal business hours.
The deliveries to Edison’s final customers in Italy are not at risk, Edison said, even if Dubini said it was reasonable to expect an extension of the disruption of QatarEnergy’s supply.
“I think the market at the moment, while tight, offers sufficient flexibility options to allow us to continue getting supplies from other areas,” Monti said, when asked whether Europe should reconsider its planned ban on Russian LNG imports, as Italian energy group Eni has said.
Monti cited the startup this year of two U.S. LNG plants — Venture Global’s Plaquemines and Golden Pass, which is partly owned by QatarEnergy and Exxon Mobil — as a reason for confidence in supply. Other plants are also under construction, he said.
“Over the next 18 months, the market will return to being structurally balanced,” Monti said.
A previously expected LNG supply glut around 2027 to 2028 is likely to shift to 2029 to 2030 due to the temporary shortfall of gas from the Middle East, Monti said.
(Reporting by Francesca Landini, editing by Gianluca Semeraro, Rod Nickel)