Middle East conflict hits Qatari LNG; supplies to India cut up to 40%

New Delhi: Qatar has halted liquefied natural gas (LNG) production after its facilities came under attack amid the ongoing West Asia conflict, disrupting supplies to India and squeezing feedstock availability for key domestic sectors.

India, which depends on long-term LNG contracts with Qatar for a significant share of its gas needs, has seen a temporary suspension of cargoes, leading to supply cuts of up to 40 per cent for industrial consumers and city gas distribution (CGD) companies. While some industrial users can switch to alternative fuels, the CNG-retailing city gas sector has warned of severe stress, saying replacement with spot LNG priced at more than double contracted rates could erode CNG’s price advantage and push consumers towards electric vehicles.

Petronet LNG Ltd said it has been unable to send ships to Qatar as the Strait of Hormuz is effectively closed due to hostilities. Qatar has also shut LNG production at the world’s largest export facility after it was targeted in an Iranian drone attack.

In a stock exchange filing, Petronet said it has issued a force majeure notice to QatarEnergy for inability to send LNG tankers due to security risks in the region. QatarEnergy has also served a force majeure notice citing military attacks on its facilities in Ras Laffan and Mesaieed. Petronet has, in turn, issued force majeure notices to downstream offtakers including GAIL, IOC and BPCL.