ING commodities strategists Warren Patterson and Ewa Manthey warn that missile damage at Qatar’s Ras Laffan Industrial City threatens a key LNG hub supplying nearly 20% of global trade. They note uncertainty over the extent of damage but stress that even limited impact will force markets to price a higher risk premium as infrastructure vulnerability in the region increases.

Qatar hub attack jolts LNG markets

"Iran’s retaliatory attacks on neighbours are more of a concern for the gas market. Qatar Energy announced that its Ras Laffan Industrial City (RLIC) suffered extensive damage after a missile strike from Iran."

"RLIC houses the world’s largest LNG export plant. Qatar exports 105 bcm of LNG from the site, accounting for nearly 20% of global LNG trade. It’s not clear what part of RLIC has been hit. The site is significant, covering 295 square kilometres. Also, it’s home to refineries and petrochemical plants."

"Damage to the LNG facilities means that the troubles for global gas markets aren't just about when flows through the Strait of Hormuz resume, but how long repair work at the sites might take. Even if it turns out that the LNG facilities are largely untouched, the market will have to price in a higher risk premium, given the growing threat to energy infrastructure in the region."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)