Qatar’s North Field Expansion delayed as EPC contractors pull out

Qatar’s North Field Expansion project has been delayed, Qatar’s energy minister said on Friday, adding that the project would be delayed by up to one year. However one source close to the project, who preferred to speak on condition of anonymity to Gas Outlook, said that delays could be much longer than officials are reporting.

The EPC contractor for the project, Technip, exited ground operations after Iran’s attack on the facilities last week, according to the source. Designing is continuing from further afield, the source said, but physical activity on the project is currently halted. Meanwhile, some 10,000 personnel have been evacuated from the complex, but there have been no injuries or deaths as of yet.

QatarEnergy and ExxonMobil did not respond to requests for comment.

Meanwhile media sources have reported that output from Qatar’s Ras Laffan has been reduced by around 17% after the attack last week, which is a massive loss considering Qatar is one of the world’s most prolific exporters of LNG and a key supplier of Europe, though Asian buyers are the most at risk from losses to Qatari LNG. The North Field expansion project was expected to add some 32 million tonnes per annum of capacity to the market.

“Market expectations had been for a short disruption, with a controlled re-start restoring supply to pre-conflict levels by mid-2026. That outlook now appears increasingly unlikely,” Kristy Kramer, Head of LNG Strategy and Market Development at Wood Mackenzie said.

QatarEnergy has previously said that the damage on the facilities is likely to cost around $20 billion per year until the repairs are finished.

There is currently a force majeure declared on Qatari production as the country cannot export volumes via the Strait of Hormuz, which is currently under blockade by Iran.

“Each additional month of disruption removes around 1.5% from annual global LNG availability,” Daniel Toleman, Research Director of Global LNG at Wood Mackenzie, said.

Planned maintenance is likely to be delayed while the market remains constricted, WoodMac warned, with LNG suppliers maximising output as much as possible to make up for the shortfall in volumes. It also means that LNG projects which are pre-FID may be seen as more favourable investment decisions, since demand is likely to remain higher for years to come.

But in the meantime, higher prices will be passed on to consumers, especially in colder months. Buyers of LNG are likely to ask for more flexibility in their contracts to hedge against disruptions and cancelled cargoes.

The changes in the gas market could also see some reversals in coal-to-gas switching.

(Writing by Miriam Malek; editing by Sophie Davies)