New Delhi, March 5: GAIL (India) Limited on Thursday said that its allocation of liquefied natural gas (LNG) under a long-term contract with Petronet LNG Limited has been reduced to zero following a force majeure notice issued by the supplier.
In a regulatory filing, GAIL informed that Petronet LNG served the force majeure notice on March 3 under the Gas Sale and Purchase Agreement. The notice cited constraints faced by certain LNG vessels during transit between India and Qatar due to maritime navigation restrictions linked to the Strait of Hormuz, along with a possible shutdown of the liquefaction facility at Ras Laffan.
The disruption follows recent hostilities in the region, which have reportedly impacted shipping routes and energy infrastructure. QatarEnergy, the upstream LNG supplier to Petronet LNG, has also communicated a potential force majeure event in light of the prevailing situation.
As a result, LNG allocation to GAIL under the affected contract has been curtailed to zero with effect from March 4. The company said it is currently assessing the implications of the development and evaluating whether any supply curtailment may be required for its downstream customers.
However, GAIL clarified that LNG supplies from other contracts and suppliers remain unaffected at present. The company added that the financial and operational impact of the force majeure event cannot be quantified at this stage.
GAIL stated it is closely monitoring the evolving situation and will keep stock exchanges informed of any material developments related to the supply disruption.
