Abu Dhabi gas hub suddenly halted: Iranian attack "fragments" cause fire, 60% of UAE natural gas supply disrupted

UAE’s core natural gas processing facility Habshan was forced to entirely halt operations on Friday, after air defense systems intercepted Iranian aerial munitions and falling debris caused a fire. The facility supplies about 60% of the UAE’s natural gas; this shutdown further strains the already fragile Gulf energy supply landscape.

The UAE Emergency Crisis and Disaster Management Center confirmed in a post on X that after air defense systems successfully intercepted an Iranian aerial munition, debris fell and sparked a fire at the Habshan plant. Authorities have intervened urgently and operations have been fully suspended. The statement said there are currently no reports of casualties.

This incident happened just weeks after a major QatarEnergy LNG complex was struck by Iran. The resulting capacity loss is estimated to cost $20 billion in repairs and years to restore.

Natural gas research institute Criterion Research initially assessed that as the fog of the Gulf war dissipates, US Gulf LNG exporters are likely to be the biggest winners of this multi-year crisis.

According to a previous report from Wallstreetcn, Israel’s largest gas field, Leviathan, has resumed production, temporarily easing the pressure on global natural gas supplies.

Habshan: The Core Hub of UAE Natural Gas Supply

The Habshan facility, operated by ADNOC Gas, is one of the world’s largest integrated gas processing complexes. It purifies, processes and fractionates raw gas from Abu Dhabi’s upstream energy assets, producing pipeline gas for domestic use, NGLs, condensate and sulfur.

According to ADNOC’s website, Habshan supplies utility and industrial customers across the UAE, covering critical sectors like desalination and steel, meeting around 60% of the nation’s gas demand.

The facility is also the starting point for ADNOC’s crude pipeline to Fujairah.

Fujairah is the world’s second-largest bunkering port and a key route bypassing the Strait of Hormuz. The Habshan shutdown not only directly impacts domestic supply, but also creates potential risks for related export logistics.

Aftershocks From Qatar LNG Attack Persist, Gulf Energy Crisis Escalates

The Habshan shutdown overlaps with the earlier attack on QatarEnergy’s LNG facility. Damage to that facility is expected to cut about 12.8 million tons of LNG capacity per year, cost $20 billion to fix, and take years to recover.

Last week, QatarEnergy officially declared force majeure on some long-term LNG contracts, affecting customers in Italy, Belgium, South Korea and China, and was effectively forced to suspend delivery obligations.

Meanwhile, ongoing disruptions in the Strait of Hormuz have further squeezed traditional export routes from the Gulf. With two major facility outages and a blocked key shipping lane happening simultaneously, the world’s LNG supplies now face multiple pressures.

According to a previous Wallstreetcn report, Israel’s largest gas field Leviathan restarted operations after a 33-day shutdown, potentially alleviating global gas market pressure. The industry is watching for a restart of Israel’s other gas field, Karish.

Energy Shock Spreads Globally, US Gulf LNG Exporters May Benefit

JPMorgan’s top commodities analyst previously warned that the path of this energy shock is becoming clear: first hitting Asia, then spreading to Africa and Europe, and eventually impacting the US, with California especially affected.

Interruptions in LNG supply have already forced power operators in many Asian and European countries to switch generators to coal in order to cope with sharply rising energy prices.

Criterion Research notes that when the fog of Gulf conflict dissipates and the energy supply landscape is reshaped, US Gulf LNG exporters are poised to be the clearest long-term beneficiaries of this crisis, with benefits extending for years.

As the main Middle Eastern LNG producers suffer capacity losses and their supply reliability comes into question, global buyers are likely to keep seeking alternative sources, greatly increasing the bargaining power and contract appeal of US exporters.

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