Shell Powers Up India’s Energy Supply, Secures Key Fertilizer Tenders Amid Gulf Instability

Shell Leverages Global LNG Portfolio to Stabilize India's Energy Inputs​

Global energy major Shell plc has significantly bolstered natural gas supplies to India. This strategic move comes in the wake of disruptions triggered by the West Asia conflict. Shell is actively leveraging its extensive global liquefied natural gas (LNG) portfolio.

Sources indicate the company drew upon LNG reserves from diverse origins, including Oman, Australia, and Nigeria. This capability allowed Shell to capture a substantial share of both spot and term market demand. This support is critical as India imports nearly half of its natural gas requirements.

Bidding Dominance in Fertilizer Sector Amid Supply Crunch​

Shell emerged as a dominant supplier during the last month's bulk LNG procurement cycle. This involved Indian fertilizer companies securing supplies. Specifically, Shell reportedly secured a supply of 4 trillion British thermal units out of 6 TBtus tendered.

This activity was vital as the government worked to ensure feedstock availability for urea production. The mandate came amid constrained supplies emanating from the Gulf region.

Addressing LNG Disruptions from Major Suppliers​

The conflict in West Asia disrupted supplies from Qatar, which has historically been India's largest LNG supplier. As a result, Shell plc's India arm stepped in by importing its largest monthly LNG volumes ever recorded in March.

Initial supplies were severely curtailed. Force majeure declarations by QatarEnergy impacted approximately 11.2 million tonnes of India's required 27 million tonnes of LNG imports.

Unmatched Infrastructure Gives Shell Supply Edge​

Shell’s ability to rapidly ramp up supplies is underpinned by robust infrastructure. This includes its 5 million tonnes-per-year LNG import terminal located at Hazira in Gujarat.

Furthermore, the company operates one of the world's largest LNG shipping fleets, comprising over 65 chartered carriers. This operational edge was key when India's primary supplier declared force majeure.

Stabilizing Key Industrial and Domestic Needs​

Beyond the fertilizer sector, Shell India also supplied gas to various industrial users and retailers. In March alone, the company became India's largest supplier of imported gas.

Initially, gas availability was rationed to prioritize fertilizer plants and city gas distribution networks. However, supplies to operating urea plants progressively ramped up, reaching nearly 90% of the requirement from April 6 and around 95% by April 9.

As alternative cargoes were secured, gas availability to other industrial and commercial sectors, including City Gas Distribution networks, was increased by an additional 10% starting April 6.

Future Outlook: Continued Market Participation​

Industry experts suggest that Shell’s high import volumes are expected to persist into April. The company is anticipated to be a major contender in the upcoming gas supply tender. This tender involves 10-12 TBtu of gas supply that fertilizer firms plan to procure mid-April.