Petronet LNG: West Asia rift will have no impact

Reports say that shipping lines in India are rejecting bookings to Doha with immediate effect

The ongoing political turmoil in West Asia is making the Indian hydrocarbon sector nervous as Petronet LNG, the country’s biggest gas importer, gets liquefied natural gas (LNG) worth Rs 18,000 crore per annum from abroad.

But, according to the ministry of petroleum and natural gas and Petronet LNG, the decision by six Arab nations to cut ties with Qatar will have “no impact” on India. On Monday, Saudi Arabia, Egypt, the United Arab Emirates, Yemen, Libya and Bahrain severed ties with Qatar, citing that the country is supporting terrorism.

“Though there are concerns regarding the rift between the most powerful states in the Arab world, there is nothing to worry for the country’s hydrocarbon sector. This is not a war-like situation and will have no impact on the Ras Laffan Liquefied Natural Gas Company Ltd (RasGas) deal with India,” said an official.

On an annual basis, Petronet LNG buys 8.5 million tonnes of LNG per year from Qatar under a long-term contract, while it also takes gas under spot deals.  “We bring at least 10 ships of gas per month. The value of gas per ship, which carries about 150 cubic metres of gas, comes to the tune of Rs 150 crore. As we have a tie-up with a Japanese shipping consortium, we have nothing to worry about the developments,” said Prabhat Singh, managing director of Petronet LNG.

There were reports that the shipping lines in India are rejecting bookings to Doha with immediate effect.  

However, it is not clear on how these sanctions would impact policy making at OPEC (Organization of the Petroleum Exporting Countries), which is currently led by Saudi Arabia. 

Qatar had played a major role in making OPEC and non-OPEC players agree to cut crude oil output last year.

The sanction by these six nations has increased the dispute over the support that Qatar extends to Muslim Brotherhood and Iran. 

India’s overall bilateral trade had touched $15.67 billion in 2014-15. Larsen & Tourbo (L&T) is reportedly one of the biggest Indian companies with presence in that region.