Petronet LNG Shares Plunge Nearly 12% After Qatar Declares Force Majeure on LNG Supplies
Stock Market Reacts to LNG Supply Disruption from Qatar
Shares of Petronet LNG Ltd tumbled sharply on Wednesday after reports emerged that Qatar has declared force majeure on liquefied natural gas deliveries following a production halt triggered by an Iranian drone strike.The stock fell 11.69 per cent to Rs 273 on the BSE. On the NSE, it declined 11.95 per cent to Rs 271.75, reflecting investor concerns over supply disruptions and their potential impact on India’s energy security.
Qatar Halts LNG Production After Iranian Drone Strike
According to sources, Qatar suspended LNG production after continued Iranian strikes on Gulf countries in retaliation for Israeli and US actions. The disruption has resulted in a cut in gas supplies to Indian industries by up to 40 per cent.Qatar is India’s largest supplier of imported natural gas and provides approximately 40 per cent of the nearly 27 million tonnes of LNG that the country imports annually. These imports are critical for sectors such as power generation, fertiliser manufacturing, CNG distribution, and piped cooking gas networks.
Petronet LNG has informed gas marketers that Qatari LNG production has been halted. The company holds a long term contract to purchase 8.5 million tonnes per annum of LNG from Qatar and also procures additional volumes from the spot market.
Impact on Indian Gas Companies and Industry
Following the supply disruption, Petronet has notified its key offtakers, GAIL (India) Ltd and Indian Oil Corporation, about the halt in supplies. Gas marketers have subsequently reduced supplies to industries while maintaining flow rates for CNG retailing.The supply cuts range between 10 per cent and 40 per cent, according to sources.
Shares of city gas distribution companies also came under pressure. Mahanagar Gas declined 8.50 per cent, Indraprastha Gas dropped 5 per cent, and Gujarat Gas fell 4 per cent on the BSE.
Strait of Hormuz Disruption Raises Energy Security Concerns
The attacks have also severely disrupted oil and LNG shipments through the Strait of Hormuz, a vital maritime route for global energy trade. The situation has driven up global energy prices and significantly increased war risk insurance and shipping costs.Iran controls the Strait, through which around 50 per cent of India’s crude oil imports and approximately 54 per cent of its LNG supplies transit. The route is critical not only for Qatari LNG but also for shipments from the UAE.
Besides Petronet LNG, companies such as Indian Oil Corporation have LNG import contracts with the UAE, adding to concerns over broader supply chain disruptions.
India LNG Imports Under Pressure
The latest developments have intensified concerns over India’s LNG imports and industrial gas supply. With Qatar accounting for a substantial share of India’s LNG needs, any prolonged disruption could further strain supply chains across multiple sectors dependent on natural gas.The market reaction underscores the sensitivity of Indian energy stocks to geopolitical developments affecting LNG supply and transit routes.
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