Gail may curtail LNG supply after Qatar supply freeze

State-run natural gas supplier Gail (India) Ltd is weighing curtailing the supply of liquefied natural gas (LNG) to its downstream consumers, as the US-Israeli attack on Iran has crippled crucial energy supplies in West Asia, it said in an exchange filing on Thursday.

“Gail is currently assessing the situation with respect to any supply curtailment that may need to be imposed on its downstream customers,” the filing said.

This comes only a day after Gail’s supplier QatarEnergy declared a force majeure on all its contracts, indicating that it will not be able to supply resources to buyers due to unforeseen circumstances.

“Further to the announcement by QatarEnergy to stop production of LNG and associated products, QatarEnergy has declared force majeure to its affected buyers,” said its 4 March post on X.

Similarly, Petronet LNG Ltd, another supplier to Gail, also declared force majeure on 3 March due to disruptions in West Asia. “...one of Gail’s long-term suppliers, Petronet LNG Ltd, has issued a force majeure notice on 3 March 2026 under its gas sale and purchase agreement. The notice has been served due to constraints faced by certain LNG vessels arising from maritime navigation restrictions related to the Strait of Hormuz during transit between India and Qatar, and possibly due to the reported shutdown of the liquefaction facility at Ras Laffan,” Gail said in the filing.

QatarEnergy has a long-term sales contract with Petronet for 7.5 million tonnes per annum (mtpa) of LNG, of which 60% is delivered to Gail after regasification. The remaining 40% is split between Indian Oil Corp. Ltd (30%) and Bharat Petroleum Corp. Ltd (10%). Petronet’s LNG facility in Dahej, Gujarat, supplies LNG to GailIL after regasification.

Gail clarified to investors that its LNG supplies from other sources were not impacted.

Energy infrastructure hit

Gail’s statement comes amid an Iran-forced blockage of the Strait of Hormuz, which is responsible for about a fifth of all LNG trade in the world, primarily from Qatar.

The strait connects the Persian Gulf with the Gulf of Oman, leading to the Arabian Sea.

India imports about 55% of its gas requirement, and has an LNG stock of 21 days, Mint reported on 4 March. India's natural gas imports stood at $14.9 billion in 2024-25, according to data from Petroleum Planning and Analysis Cell (PPAC), of which Qatar’s share was about 50%. According to government data, natural gas accounts for about 7% of India’s energy basket, and the government aims to take it to 15% by 2030.

The US and Israel attacked Iran and eliminated the head of state, Ayatollah Ali Khamenei, on 28 February, over Iran's potential development of nuclear weapons. Iran retaliated by targeting bases of the US and its allies in the region, putting crucial energy infrastructure at risk.

The conflict has also spread across open seas, with the US torpedoing an Iranian vessel, IRIS Dena, near Sri Lanka. The Iranian vessel was returning from India after a joint naval exercise.