Mumbai: Shares of Petronet LNG fell nearly 4 per cent on Wednesday after reports suggested that QatarEnergy is preparing to extend its force majeure on liquefied natural gas (LNG) shipments through mid-October, raising concerns over prolonged supply disruptions amid the ongoing West Asia conflict. The development weighed on investor sentiment, with fears that India’s largest LNG importer could face continued challenges in securing supplies.
According to reports, several LNG buyers across Asia and Europe are expecting formal notifications from QatarEnergy extending the force majeure beyond the previously anticipated timelines. While QatarEnergy has not officially announced the extension, the reports have fuelled concerns over the stability of global LNG supplies.
Shares decline on supply concerns
Petronet LNG shares dropped close to 4 per cent during Wednesday’s trading session after news of the possible extension emerged.
The decline comes months after the company had already issued force majeure notices to its customers following disruptions in LNG shipments caused by the conflict in the Middle East and security concerns around the Strait of Hormuz.
Market participants fear that a prolonged disruption could impact LNG availability, increase procurement costs and affect margins for companies dependent on long-term supplies from Qatar.
QatarEnergy likely to extend force majeure
According to Reuters, QatarEnergy is preparing to extend force majeure declarations on LNG deliveries to several Asian countries, including India, as shipping disruptions continue.
The notices, initially expected to expire in August and early September, could now remain in effect until mid-September or even mid-October, depending on developments in the region. The company has reportedly also chartered out several LNG vessels through October, signalling expectations of prolonged disruption.
Force majeure is a contractual provision that allows parties to suspend or delay obligations when extraordinary events beyond their control prevent normal operations.
Strait of Hormuz remains key concern
The disruption stems from the continuing conflict in West Asia and security threats in the Strait of Hormuz, one of the world’s busiest energy shipping routes.
Qatar accounts for around 20 per cent of global LNG exports, and virtually all of its LNG shipments pass through the Strait of Hormuz before reaching international markets. Continued attacks on shipping and heightened regional tensions have disrupted exports and increased uncertainty across the global energy market.
Analysts believe that any prolonged closure or disruption of the route could tighten LNG supplies ahead of the northern hemisphere winter, potentially pushing up international gas prices.
Impact on India’s gas sector
Petronet LNG is India’s largest importer of liquefied natural gas and has long-term supply agreements with QatarEnergy.
Earlier this year, the company issued force majeure notices to key customers, including GAIL, Indian Oil Corporation (IOCL) and Bharat Petroleum Corporation (BPCL), after disruptions affected contracted cargoes. GAIL had also indicated that it might need to assess gas supply reductions to certain customers if the situation persisted.
Although the full financial impact of the latest extension remains uncertain, analysts say investors are closely monitoring developments as any prolonged interruption could affect LNG imports, industrial gas supplies and pricing across the domestic market.
Markets await official confirmation
At present, QatarEnergy has not publicly confirmed the reported extension of force majeure. However, reports indicating that buyers are expecting formal notices have heightened market concerns.
Investors are likely to remain cautious until there is greater clarity on the duration of the disruption and the timeline for the resumption of normal LNG exports from Qatar.
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