Analyst chatter has grown louder in the last year over a potential LNG glut as US developers build out several large projects. Those concerns have been put to rest for now, following an unprecedented outage at Qatar’s Ras Laffan complex that has shaken global gas markets.
QatarEnergy declared a force majeure last Wednesday (March 3) at Ras Laffan, two days after Iran hit the sprawling industrial complex with a drone strike amid the escalating war with the US and Israel. On top of the drone attack, Qatar’s operations were disrupted by the effective closure of the Strait of Hormuz, causing LNG supply to back up at the facility as ships avoided the waterway.
The force majeure halts LNG production at the world’s largest liquefaction site. Ras Laffan can produce 77 Mtpa of LNG (~10 Bcf/d) from 14 trains, accounting for about 20% of global supply. Qatar is a leading LNG exporter to Europe and Asia and is the largest supplier to China. The outage also halts output of associated energy products at Ras Laffan, including LPGs, naptha, diesel and fertilizer.
Global gas markets surged as word spread of the shutdown. Prices at the Dutch Title Transfer Facility (TTF), a leading hub for LNG imports into Europe, jumped 70% over four days, to the equivalent of $15.90/MMBtu last Thursday (March 5). The May ’26 contract for the Japan Korea Marker (JKM), a proxy for spot LNG prices in Asia, increased 96% from Feb. 27-March 4, settling that day at $21.18.
By contrast, the US gas market’s response to the Iran war has been fairly muted. The Henry Hub April ’26 contract traded Tuesday afternoon around $3.05/MMBtu, a gain of $0.20 from Feb. 27, prior to the start of hostilities.
QatarEnergy has provided no guidance on the extent of damage from the drone strike, or a timeline for restarting its operations. Reuters reports that the company will need at least four weeks to fully restore LNG production at Ras Laffan. Even if the drone strike caused limited damage, the risks of shipping through the Strait of Hormuz amid the war will continue to impede a return to normal business.
Customers at existing US LNG projects will benefit in the short term from the force majeure as buyers in Europe and Asia seek alternative cargoes. US projects mostly use free on board (FOB) contracting terms, meaning counterparties gain rights to the LNG supply at the dock and can profit on sales overseas.
US LNG terminals were already running near capacity, so there is little room for supply upside from the Qatari outage. But margins on unsold LNG cargoes will be much healthier for the foreseeable future due to the spike in global prices.
The figure above shows East Daley Analytics’ estimates for capacity by counterparty at US LNG projects currently in operation. These estimates include long-term sales contracts for customers, as well as spare capacity controlled by project sponsors.
Venture Global (VG) looks to be the big winner from the Middle East turmoil. VG ramped LNG production at its Plaquemines site through 2025, taking in over 4 Bcf/d of feedgas in January and February. On its 4Q25 earnings call, VG said all 36 mini-trains at Plaquemines are now operational. However, the sale and purchase agreements (SPAs) backing the project don’t go into effect until later this year, leaving Venture Global free to sell LNG cargoes until then. Plaquemines Phase 1 has nameplate capacity of 22.5 Mtpa (3 Bcf/d), though gas intake at the project suggests VG is producing above nameplate.
Cheniere Energy (LNG) stands to profit for similar reasons. Cheniere is constructing the Stage 3 expansion at Corpus Christi, which includes seven midscale trains. The company has started producing LNG from Trains 1-4 of the project, amounting to 6 Mtpa (~0.8 Bcf/d). Its Cheniere Marketing unit will retain control of the LNG output until commercial contracts begin at a later date.
Shell (SEL) is the leading counterparty at operational US LNG plants with 10 Mtpa (~1.3 Bcf/d) of supply. Shell controls 5.5 Mtpa at Cheniere’s Sabine Pass Liquefaction via its purchase of BG Group in 2015. Shell also has contracts for 2 Mtpa at VG’s Calcasieu Pass and is the sole capacity holder at Southern LNG’s Elba Island facility (2.5 Mtpa).
Paris-based TotalEnergies (TTE) is the second-largest customer for US LNG, managing a portfolio of 8.5 Mtpa (1.1 Bcf/d). Total has contracts with Sabine Pass, Freeport LNG and Sempra Energy’s (SRE) Cameron LNG. TTE has expanded its US supply in recent years through the acquisitions of Engie and Toshiba’s LNG businesses.
These companies likely have pre-sold some share of their US LNG under prior contracts, and may not be in position to fully capitalize on the global price spike. But the arbitrage window is now wide open for any flexible cargoes.
See East Daley’s Macro Supply & Demand report to learn more about the LNG outlook. – Andrew Ware Tickers: LNG, SEL, SRE, TTE, VG.
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