Petronet LNG issues force majeure after QatarEnergy halts production

Petronet LNG issued force majeure to QatarEnergy and its off-takers after LNG production was halted amid the West Asia crisis, saying the impact cannot be estimated at this point

India’s largest liquefied natural gas (LNG) importer Petronet LNG Ltd (PLL) has issued force majeure notice to QatarEnergy and its offtakers, including GAIL (India) Limited, Indian Oil Corporation Limited (IOCL), and Bharat Petroleum Corporation Limited (BPCL).

 

As the crisis deepens in West Asia, QatarEnergy, a key LNG supplier to India, has temporarily halted production.

 

“Considering the prevailing security situation and the material risks posed to maritime navigation, the company (Petronet LNG) has issued a force majeure notice to QatarEnergy in respect of its LNG tankers. These are Disha, Raahi, and Aseem,” said Petronet LNG in a stock exchange filing.

 

 

Meanwhile, QatarEnergy, has also issued force majeure after Iran retaliated following US and Israeli military strikes.

 

Norway-based energy consultancy Rystad Energy said natural gas prices have increased by over 40 per cent. This follows QatarEnergy’s decision to cease LNG production, combined with operations halted through the Strait of Hormuz, removing significant volumes from the global market as conflicts escalate.

 

Strait of Hormuz is a critical chokepoint between Iran and Oman which supports 30 per cent of global seaborne crude trade. 

 

“In light of the recent and ongoing war in the Middle East region involving Iran and Israel, vessels are presently unable to safely transit through the Strait of Hormuz to reach Ras Laffan, the loading port of QatarEnergy,” said Petronet LNG.

 

The company said the likely impact of force majeure cannot be estimated at this point of time. "Acts of war" is excluded under Business Interruption Insurance covers taken by Petronet LNG.

 

“With Qatari LNG output halted and the Strait of Hormuz closed, global LNG supply is set to tighten sharply, a trend already reflected in recent price movements. The scale of lost volumes will depend on the extent of any infrastructure damage, which is still being assessed, and the duration of the Strait’s closure to maritime traffic,” said Rystad Energy.