On Thursday, GAIL (India) Limited announced that its long-term LNG allocation with Petronet LNG Limited (PLL) has been erased. This decision was made in response to a force majeure notice, which is associated with potential closure of the Ras Laffan liquefaction facility in Qatar and restrictions on maritime navigation in the Strait of Hormuz.
Citing limitations experienced by LNG boats travelling between Qatar and India, GAIL stated in a regulatory filing that PLL had invoked force majeure on 3 March under the Gas Sale and Purchase Agreement. This news comes after QatarEnergy warned of a possible force majeure situation due to regional tensions.
The contract’s LNG supplies were reduced to zero as of March 4. GAIL clarified that supplies from other sources are now unaffected and stated that it is evaluating the potential impact on downstream customers.
While the business is keeping a careful eye on developments, it has not yet been able to quantify the financial and operational impact.
