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GAIL's LNG Supply Hits Zero After Petronet Force Majeure Over Strait of Hormuz

GAIL Limited has announced that its LNG allocation from Petronet LNG under a long-term contract has been reduced to zero. This follows a force majeure notice issued by Petronet citing maritime navigation constraints in the Strait of Hormuz and a possible shutdown at Qatar's Ras Laffan facility. The upstream supplier QatarEnergy had also communicated a potential force majeure event due to regional hostilities. GAIL is assessing the situation for potential downstream supply curtailment while noting supplies from other sources remain unaffected for now.

Key Points: GAIL LNG Supply Stops After Petronet Force Majeure Notice

  • Force majeure halts LNG supply
  • Strait of Hormuz navigation restrictions cited
  • Ras Laffan facility shutdown possible
  • Downstream customer impact under assessment
  • Other supply sources currently unaffected
2 min read

Gas supply to GAIL stops after Petronet LNG issues force majeure notice

Petronet LNG declares force majeure to GAIL, cutting LNG allocation to zero due to Strait of Hormuz disruptions and Ras Laffan facility issues.

"The notice has been served due to constraints faced by certain LNG vessels arising from maritime navigation restrictions related to the Strait of Hormuz - GAIL Exchange Filing"

New Delhi, March 5

GAIL Limited on Thursday said the allocation of liquefied natural gas from Petronet LNG Limited under a long-term contract has been reduced to zero after the supplier issued a force majeure notice due to disruptions linked to maritime navigation restrictions in the Strait of Hormuz and possible shutdown of facilities in Ras Laffan.

In a regulatory filing, the company said Petronet LNG issued the force majeure notice on March 3 under the Gas Sale and Purchase Agreement, citing constraints faced by certain LNG vessels during transit between India and Qatar.

The situation has arisen amid maritime navigation restrictions in the Strait of Hormuz and reports of a shutdown at the liquefaction facility in Ras Laffan.

"This is to inform that one of GAIL's long-term suppliers, Petronet LNG Limited (PLL), has issued a Force Majeure (FM) notice on March 3 under its Gas Sale and Purchase Agreement," it said in its exchange filing.

"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 as well as possibly due to reported shutdown of liquefaction facility at Ras Laffan," it added.

The development comes after QatarEnergy, the upstream LNG supplier to Petronet LNG, also communicated a potential force majeure event due to recent hostilities in the region.

Following the notice, the allocation of LNG to GAIL under the contract has been reduced to zero with effect from March 4, the company said.

GAIL added that it is currently assessing the situation to determine whether any supply curtailment may be required for its downstream customers.

However, the company clarified that LNG supplies from other sources and suppliers remain unaffected for now.

GAIL said the potential impact of the ongoing force majeure situation cannot be quantified at this stage.

"The company is closely monitoring developments and will keep stock exchanges informed of any material updates related to the situation," GAIL noted.

- IANS

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Reader Comments

S
Sarah B
Working in the logistics sector, I see how global chokepoints like the Strait of Hormuz can cripple supply chains overnight. This is a stark reminder for India to diversify its energy routes and suppliers more aggressively.
P
Priyanka N
Just when we thought inflation was cooling down. If this affects CNG prices, my monthly budget for commuting is going to take a big hit. Fingers crossed other suppliers can cover the gap. 🤞
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Aman W
While force majeure is a legal reality, it feels like our energy security is always at the mercy of foreign events. Time to fast-track domestic natural gas exploration and renewable alternatives. Jai Hind!
M
Michael C
Respectfully, the article and GAIL's statement are quite vague on the actual mitigation steps. "Assessing the situation" is standard corporate language. The public and investors deserve a clearer picture of the plan B for downstream customers.
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Kavya N
My father works in a fertilizer plant that uses gas from GAIL. Really hoping there's no curtailment. These geopolitical issues directly affect livelihoods and food production. Stay strong, GAIL team!

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