India imports about 27 million tonnes of liquefied natural gas (LNG) every year, of which Qatar supplies about 40 percent. This gas is used by Bharat to meet the demand in different sectors, from power generation and fertilizer production to CNG distribution and piped cooking gas networks.
Gas importer Petronet LNG Ltd told gas marketers that Qatar has halted its liquefied natural gas production as Iran continues to attack Gulf countries in retaliation for Israel and US attacks.
The attacks have also nearly halted oil and LNG shipments through the Strait of Hormuz, sending global energy prices soaring as well as war-risk insurance and shipping costs. Iran controls the strait — a vital maritime chokepoint through which about 50 percent of India’s crude oil imports and about 54 percent of its LNG supplies transit. It is transit for LNG not only from Qatar but also from UAE.
Sources said Petronet has informed its gas offtaker, GAIL (India) Ltd and Indian Oil Corporation (IOC) about the stoppage of supplies from Qatar. In turn, the gas marketer has cut supply to industries while maintaining the flow rate for CNG retailing.
He said that this reduction ranges from 10 percent to 40 percent.
Petronet has a long-term contract to buy 8.5 million tonnes of LNG every year from Qatar. In addition, it also purchases Qatari LNG from the spot market. Apart from Petronet, companies like IOC have LNG import contracts with the UAE.
GAIL and IOC are considering using spot or existing markets to meet the shortfall, but prices have gone up, sources said. LNG in the spot market is now priced at USD 25 per million British thermal units, almost double the term contract rate.
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