00:00As we said, the top story today very much is Qatar reporting extensive damage to the Ras Lofan Industrial City,
00:07which does house the world's largest LNG export plant.
00:11Our BI team, or Bloomberg Intelligence, says the shutdown is going to take about 7 million tonnes of LNG out
00:17of the global markets each month.
00:19Let's get more now, or analysis now, with Leslie Palti-Guzman, founder and president of advisory firm Energy Vista.
00:26So, Leslie, thanks very much for joining us this evening.
00:30Talk to us about the impact and the significance of this, because as we're really seeing today reflected in markets,
00:37investors are very much rethinking, it seems, the broader impact and how long this also might last.
00:49What happened today with the fires and the strike on Ras Lofan is putting further away the normalization of Qatar
00:58-LNG flows
00:58and the comeback of their cargos into the global LNG market.
01:03So, before the strikes, we could potentially see a restart within two months, you know, maybe 15 million tonnes removed
01:11from the market.
01:11But depending on the scale of the damage, now, you know, I'm planning for maybe four or five months of
01:19further delay.
01:20And that would mean, you know, double the amount of LNG, so potentially up to 30 million tonnes of LNG
01:28being removed from the market.
01:31So, Leslie, David here, so let's call it half a year.
01:36In the meantime, and clearly that's going to drive prices higher.
01:39In the meantime, what do you think is going on in as far as economies and trying to scramble for
01:45supplies?
01:46What are you hearing?
01:46What are you seeing?
01:47Yeah, so we're going to see an acceleration of potential demand destruction.
01:53I'm looking especially at Southeast Asia and countries like Bangladesh or South Asia, Bangladesh, Pakistan, India,
02:02that are very dependent on Qatari LNG, but they're also very price sensitive.
02:07So, any increase in the spot LNG price will mean that they won't be able to compensate with spot LNG,
02:15all the missing Qatari cargoes, and they will have to fund alternatives with other fuels.
02:20It may mean more coal, or it may mean demand destruction and less use of power generation or gas for
02:28industrial use.
02:29For India specifically, it's problematic for cooking gas, for example.
02:33They are very dependent on LPG also for cooking gas.
02:36Yes, and that's going to be an issue, even for fertilizer.
02:40I mean, it's a series of commodities that are impacted.
02:47What about as well, I mean, as you said, we're taking a lot of supply offline,
02:53but we're also prolonging expansion products or projects rather that were underway.
02:59Just talk to us about that.
03:00Yeah, so what's interesting is that there are two large global LNG suppliers right now.
03:08The two largest are the U.S. and Qatar, and both are undergoing massive expansion of their capacity.
03:15And Qatar not only now has halted its existing volume, so volumes of existing capacity,
03:24but it really also underlines increased uncertainty with the future volumes of its expansion.
03:32So as we see further damage, but also security vulnerability around Ras LaFan and its geography,
03:42not only because it's sharing this big, large field with Iran,
03:45but also because it has to use the Strait of Hormuz to evacuate those cargoes,
03:51there is increasingly, you know, a big uncertainty hanging over this massive expansion.
Comments