Middle East War : Energy crisis for India! Iranian attack in Qatar disrupts LNG supplies; Prices are likely to double

• Qatar halts LNG production
• Iran attack on export hub
• Production completely stopped

Navrastra Bureau, Delhi. Qatar has halted liquefied natural gas (LNG) production following attacks on power plants amid ongoing hostilities in West Asia. This has affected India’s supply. A fuel availability crisis has emerged for major domestic sectors. India depends on long-term LNG contracts with Qatar for its natural gas needs. The temporary suspension of shipments from Qatar has led to a supply cut of up to 40 percent for industrial customers and city gas distribution (CGD) companies. While some industrial units may switch to alternative fuels, the city gas sector, which sells CNG, faces a serious crisis.

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Petronet LNG Ltd, India’s largest LNG importer, cannot send its ships to Qatar. The main reason for this is that the Strait of Hormuz is closed. Most West Asian countries, including Qatar, export their oil and gas through this narrow sea route.

A Qatari company has indicated its inability to supply supplies due to the ongoing war in the region, which has completely halted production after Iran targeted the world’s largest export hub in Qatar with a drone attack. Petronet has also informed the gas procurement companies GAIL, IOC and BPCL considering the security situation and maritime navigation risk.

Global energy flow disrupted

According to reports, the conflict has significantly reduced the number of ships passing through the Strait of Hormuz, disrupting global energy flows. This route is important for India, as it accounts for about 50 percent of the country’s total crude oil imports and 54 percent of its LNG supply. Currently, GAIL and IOC are providing alternative sources of crude oil. We are trying to buy gas from the market, but the prices there have almost doubled from the contract rates. It can directly affect consumers.

2.70 Crore Tons of LNG import per annum

India imports 2.7 million tonnes of LNG every year, 40 percent of which comes from Qatar alone. Concerned over supply cuts, the Association of CGD Entities (ACE) has written to state-owned gas company GAIL, requesting it to ensure availability of domestic gas and LNG.

The association said the 60 per cent reduction in low-cost gas supply and total lack of market-based supply would adversely affect distribution of CNG and piped cooking gas. He has sought clear guidance from the government during this crisis. QatarNG confirmed in a statement that production has been halted due to military attacks on its operational facilities in the industrial cities of Ras Laffan and Mesaid.

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