Orlen becomes the first buyer to cancel a long-term Qatari LNG contract as force majeure persists, tightening European supply and forcing the Polish firm to seek alternative, potentially costlier, market volumes.
Qatar's force majeure persists and exports are far below pre-war levels, at 2.7 million tons last month versus close to 6.2 million tons in February. Orlen's cancellation of its 1 million ton annual contract underlines how scarce Qatari LNG has become, tightening the European gas supply picture and supporting higher prices.
A regulatory filing from late Tuesday confirms Orlen is the first long-term buyer to cancel its Qatari LNG contract of 1 million tons annually running until 2034, because QatarEnergy cannot meet its obligations. Orlen loses a contracted long-term supply pillar and will likely have to replace those volumes at more expensive market prices, a negative for its feedstock costs and supply security.
Polish energy firm Orlen has officially terminated its long-term LNG supply agreement with QatarEnergy, citing the supplier's inability to meet obligations. The contract, which was set to run until 2034, was impacted by QatarEnergy's ongoing force majeure, which has been extended through the end of 2026 due to persistent security risks in the Strait of Hormuz.
Orlen cancelled a 1 million ton per year supply contract that ran until 2034 because QatarEnergy cannot deliver, showing long-term Qatari LNG is unavailable and reducing supply available to Europe, which pushes prices up.
Exports via the Strait of Hormuz reached 31 tankers last month, the highest since February, but total exports remain far below pre-war levels and force majeure is extended to the end of the year.
A long-term LNG supply contract with QatarEnergy for 1 million tons of gas annually, signed in 2009, delivering since 2016, with a term until 2034, cancelled because QatarEnergy declared force majeure.
It removes a cheap contracted supply source, meaning Orlen may need to buy replacement gas at higher market prices, but the cancellation stems from the supplier's inability to deliver, not an Orlen breach.