Gujarat Gas Reduces Industrial Supply by 50% Amid US Iran Conflict Disruption
Gujarat Gas Ltd. will be in focus on Wednesday, March 4, after the company announced a 50 percent reduction in gas supply to the industrial sector following disruptions linked to the ongoing US Iran conflict in the Middle East.The decision comes as the availability of regasified liquefied natural gas, or R LNG, has been significantly affected due to recent international developments impacting global energy supply chains.
Company Invokes Force Majeure Under Gas Sales Agreement
In a letter addressed to its customers, Gujarat Gas stated that the reduced availability of R LNG is beyond the company’s control and qualifies as a Force Majeure event under the terms of its Gas Sales Agreement.The company further cautioned that in the event of consumption exceeding the allocated quantity, it will immediately suspend gas supply without any prior notice.
QatarEnergy Halts LNG Production After Infrastructure Damage
The supply disruption follows a halt in LNG production by QatarEnergy after parts of its infrastructure were reportedly damaged by drones during the conflict, affecting production and operations.Gujarat Gas imports nearly 70 percent of its raw material requirements from Qatar, making it significantly exposed to developments in the Gulf region.
Citi Flags Risk to India’s Gas Value Chain
Brokerage firm Citi noted that Qatar’s suspension of LNG production poses a near term risk to India’s gas value chain.Qatar supplies around 40 percent to 50 percent of India’s LNG requirements, making a complete replacement difficult, particularly in an environment of elevated global LNG prices.
Citi indicated that Gujarat Gas is among the most vulnerable companies due to its dependence on Qatari supply and spot LNG purchases.
Gujarat Gas Shares Close Lower
Shares of Gujarat Gas ended 3 percent lower on Monday at ₹398.05, reflecting investor reaction to the supply concerns.With industrial supply curtailed and global LNG flows disrupted, the company is expected to remain under close market watch in the coming sessions.
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