Qatar fallout: GAIL says LNG supplies may be hit
NEW DELHI: State-run GAIL India Thursday said its supplies from Petronet LNG may be hit due to curtailments from QatarEnergy, even as the government is in talks with Australia and Canada to purchase gas.On Wednesday, Petronet had informed stock exchanges about the force majeure notice from QatarEnergy which was forced to stop production after a strike by Iran, affecting nearly a fifth of global supplies. It had issued notices to GAIL, IndianOil and Bharat Petroleum, which have agreements with the LNG player.“GAIL is currently assessing the situation with respect to any supply curtailment that may need to be imposed on its downstream customers. Notwithstanding the above, LNG supplies to GAIL from other sources/suppliers are currently unaffected. At this stage, the potential impact of the ongoing force majeure situation cannot be quantified,” the PSU is said in an exchange filing.Tapping alternative supplies: OfficialsNearly 30% of India’s supplies of natural gas from West Asia, crucial for auto and kitchen fuel as well as feedstock for fertiliser, power and other industries, have been hit. This may require re-prioritisation of gas supply through reduced flow to certain segments, although retail consumers are unlikely to be affected.Gujarat Gas, one of India’s largest city gas distributors in the western state, has already declared force majeure on industrial gas supplies after strain on imported LNG.A senior petroleum ministry official said India currently imports about 195 million metric standard cubic metres per day (mmscmd) of natural gas, of which Qatar supplies around 60 mmscmd. These supplies have been disrupted due to the blockage of the Strait of Hormuz.Officials said while supplies from alternative sources are being tapped to fill the gap, critical sectors such as fertilisers will be given priority to meet peak sowing season demand.“During Holi, industrial production in north India comes down drastically as a large number of workers travel to their home states. It is easier to restrict industrial supply during this time. Also, industries can arrange energy from alternate sources,” an official said.They added that India may sign short-term contracts and undertake high-priced spot purchases of natural gas to bridge the supply gap caused by the crisis. Replacement LNG cargoes may be sourced from the US, West Africa, Australia or Russia, although this could add to transportation costs and delivery time.
