Reuters: India cuts industrial gas supplies after Qatar outage

Indian companies have reduced natural gas supplies to industries in anticipation of tighter imports from the Middle East, following a halt in production by top exporter Qatar, four industry sources familiar with the matter told Reuters.

Qatar suspended its liquefied natural gas (LNG) production on March 2, as Iran continued strikes on Gulf countries in retaliation for Israeli and U.S. attacks. The ongoing attacks have also disrupted oil and gas shipments through the Strait of Hormuz, driving up global energy prices and shipping costs.

India, the world’s fourth-largest LNG buyer, relies heavily on the Middle East for its imports. Top LNG importer Petronet LNG Ltd has informed GAIL (India) and other companies about lower supplies, two sources said. The South Asian nation is the top LNG client for Abu Dhabi National Oil Company and the second-largest buyer of Qatari LNG.

GAIL and Indian Oil Corp (IOC) informed customers of the gas supply cut late on March 2, one of the sources said. The reductions range from 10% to 30%, according to two of the sources. They added that the cuts have been set at minimum lifting quantities to shield suppliers from penalties under contractual terms.

To compensate for the LNG shortfall, companies including IOC, GAIL, and Petronet LNG are planning to issue spot tenders, two of the sources said, although spot prices, freight, and insurance costs have surged.

By Sabina Mammadli