What happened
QatarEnergy notified Edison on Tuesday that it will be unable to deliver three further liquefied natural gas cargoes, prompting an extension of a force majeure notice through the end of September, the Italian utility said in a statement.
Scale of the disruption
With the latest missings, the total number of LNG cargoes covered by the force majeure during this period rises to 24, which Edison estimates corresponds to roughly 3 billion cubic meters of natural gas.
How Edison is responding
Edison said it has been able to secure alternative supplies to serve all its customers and to meet its commercial commitments. By Tuesday the company had replaced 17 of the LNG cargoes at the Adriatic LNG terminal, an amount Edison puts at about 1.6 billion cubic meters of gas.
Contractual context
The Italian utility, which is owned by French energy group EDF, maintains a long-term supply contract with QatarEnergy. Under that agreement, QatarEnergy is to deliver 6.4 billion cubic meters of natural gas to Italy each year. The deal has been in place since 2009 and runs for 25 years.
Financial impact
Edison reported that its operating profit in the first quarter fell by half, a deterioration it attributed primarily to the force majeure declared by QatarEnergy. The company has trimmed its full-year guidance, citing uncertainty linked to the conflict in the Middle East as a reason for the revision.
Takeaway
The extension of QatarEnergy's force majeure through the end of September increases the volume of gas affected and has forced Edison to accelerate procurement from other sources. Edison states it has replaced a substantial portion of the cargoes through the Adriatic LNG terminal and affirms its ability to supply customers despite the disruption. The company has nevertheless recorded a significant profit impact and has adjusted its outlook amid broader geopolitical uncertainty.
Note: The article reflects information provided by Edison regarding deliveries, cargo replacement volumes, contractual terms, and the companys financial performance.