As the West Asian crisis prolongs, how is India placed on the natural gas front?
New Delhi: India imports around 50% of its liquefied natural gas (LNG) requirements from West Asia, and most of it is sourced from Qatar. With the ongoing blockade of the Strait of Hormuz and attacks on Ras Laffan industrial City, a large chunk of India's imports are halted. This supply crunch may impact several downstream industries in India including fertilizers and steel.
Mint takes a look at the impact of war on the country's gas supplies.About 20% of global LNG supplies come through the Strait of Hormuz, which has almost come to a halt since the war started on 28 February and the eventual blockade of the strait. The attacks on the Ras Laffan industrial city and LNG project of QatarEnergy has significantly hit the production and capacity of the company. The CEO QatarEnergy Saad Sherida Al-Kaabi said that missile attacks on its Ras Laffan plant reduced Qatar’s LNG export capacity by 17% and caused an estimated loss of $20 billion in annual revenue.
Extensive damage to its production facilities would take up to five years to repair and have compelled the firm to declare long-term force majeure, he said, which would impact several Qatari gas buyers.Since the start of the West Asian war, natural gas prices have witnessed significant volatility. The US natural gas futures rose nearly 13% to $3.23 per metric million British thermal unit (MMBtu) since the start of the war. At the time of writing the article, it was at $3.01 per MMBtu.
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