GAIL says LNG supply from Petronet cut to zero after force majeure

GAIL said LNG allocation from Petronet LNG under a long-term contract has been reduced to zero after a force majeure notice linked to navigation restrictions in the Strait of Hormuz and a possible shutdown at Qatar’s Ras Laffan liquefaction facility

New Delhi: GAIL (India) Limited on Thursday said the allocation of liquefied natural gas (LNG) 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.

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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.