Blitz Bureau
NEW DELHI: GAIL announced last week that it will assess curbing supplies to natural gas customers after a force majeure notice from long-term supplier Petronet LNG over constraints on vessels as conflict escalates in West Asia, reports Reuters.
The US and Israel’s war on Iran has disrupted fuel shipments from the Gulf, affecting India’s imports of liquefied natural gas (LNG) from key supplier Qatar.
Fallout from the US-Israeli attacks on Iran and a widening war has brought the transit of oil and LNG through the Strait of Hormuz to a near halt after some vessels in the area were hit.
The allocation of LNG from Petronet to GAIL has been reduced to zero with effect from March 4, GAIL said, adding that the potential impact from the force majeure could not be quantified.
LNG supplies to GAIL from other sources and suppliers are unaffected, the gas marketing company said in a statement to stock exchanges.
Similarly, Mangalore Refinery and Petrochemicals (MRPL) also declared force majeure on all gasoline export cargoes for March and April amid conflict between US and Iran that has upended crude oil flows from the Gulf, traders said on March 4.
The two traders, who deal with the company and said they received a notice from them, said MRPL invoked force majeure, a legal term which allows a company to invoke circumstances outside of their control to not fulfil a contract, for its gasoline exports for March and April.
The state-run refiner, which operates a 500,000-barrel-per-day refinery in the southern state of Karnataka, exports about 40 per cent of its refined fuel output.
Shipping through the Strait of Hormuz between Iran and Oman, which carries around a fifth of oil consumed globally, has virtually stopped after vessels in the area were hit in Iranian attacks after US and Israeli strikes struck the country, leaving energy trade flows in disarray.
The allocation of LNG from Petronet to GAIL has been reduced to zero with effect from March 4, GAIL said, adding that the potential impact from the force majeure could not be quantified.
MRPL did not immediately respond to Reuters’ email request for a comment. A source with the company, who asked to remain unidentified, confirmed the force majeure.
Indian refiners meet about 40 per cent of their crude needs through purchases from West Asia, in addition to sourcing from spot markets and processing domestic oil.
India is scouting for alternative sources for importing crude oil, liquefied petroleum gas and liquefied natural gas, a Government source said on March 3.
MRPL said in January that it was exploring purchases of Venezuelan oil after the refiner halted imports of Russian oil to comply with Western sanctions.
India holds sufficient crude inventories to meet demand for about 25 days. Also, refiners hold a 25-day inventory of gasoil, gasoline and liquefied petroleum gas, the Government source added.