Petronet LNG Qatar supply shock: key facts for 2026

Why this disruption matters

Petronet LNG, India’s top gas importer, expects to receive its full contracted liquefied natural gas (LNG) supply from Qatar once the geopolitical situation in the Middle East stabilises, according to chief executive A. K. Singh. The expectation comes after a sharp supply shock that has tightened LNG availability for Indian gas marketers and industrial consumers. Qatar is India’s largest LNG supplier and a key source of long-term contracted volumes, which typically provide stability compared with spot cargoes. But the current disruption is linked to both security risks at sea and damage to production infrastructure.

The Strait of Hormuz is central to this story because it is a critical route for energy shipments. Petronet has said vessels are unable to safely transit through the strait to reach Ras Laffan, QatarEnergy’s LNG loading port. With shipping constrained and Ras Laffan impacted, cargo flows into India have been interrupted. The result is immediate uncertainty for offtakers and downstream customers who rely on steady gas supply.

What triggered the force majeure

Supplies were halted in March following the closure of the Strait of Hormuz. The situation worsened after Iran struck two of Qatar’s 14 LNG production trains, prompting Qatar to declare force majeure. QatarEnergy later confirmed it had stopped production of LNG and associated products due to the evolving security situation. Petronet, as a buyer and ship operator, invoked force majeure on 3 March 2026 after LNG shipments faced restrictions linked to the strait.

Singh said Petronet had not been receiving cargoes from the trains that were damaged in the attacks. He added that Qatar had notified Petronet of force majeure for May deliveries. Petronet has also issued corresponding force majeure notices to its downstream offtakers. These include GAIL (India) Ltd, Indian Oil Corporation Ltd (IOCL), and Bharat Petroleum Corporation Ltd (BPCL).

The scale of Ras Laffan damage and repair timeline

The damage is centred on Qatar’s Ras Laffan LNG export complex, described in the provided information as an 82 million metric tonnes per annum (mmtpa) facility. Separately, Nomura referred to Ras Laffan as having 77 mtpa of export capacity, and noted it represents about 20% of global LNG trade. QatarEnergy CEO Saad al-Kaabi said missile strikes damaged infrastructure accounting for about 17% of Qatar’s LNG export capacity.

Qatar has said repairs will sideline 12.8 million tonnes per year of LNG for three to five years. That repair timeline indicates the disruption can extend beyond the immediate shipping constraints, depending on which trains were affected and how supply allocations are managed once operations normalise. Petronet’s management has stated that “India-specific trains were not damaged” at Ras Laffan and supplies to India may resume quickly once force majeure is lifted.

How much Qatar LNG Petronet and India rely on

Petronet has long-term contracts to import 8.5 mtpa of LNG from Qatar and also buys additional supplies from the spot market. In another contract reference in the provided information, Qatar has a contract to supply 7.5 million metric tons per year to Petronet, described as equivalent to 9-10 cargoes per month. For India’s broader balance, the Centre estimates natural gas usage of 189 million metric standard cubic metres per day (mmscmd), of which 92 mmscmd is imported.

India imports around 27 mtpa of LNG from multiple sources. Qatar supplies about 40% of the nearly 27 million tonnes a year of LNG that India imports annually, according to the provided information. Another figure cited says India imports 50% of its gas requirements as LNG, at 9.5-10 mmtpa or 40 million cubic metres of gas per day (mmcmd), with around 25% of this coming from Qatar’s plant.

Immediate impact on Indian offtakers and customers

GAIL has said LNG supplies linked to its long-term contracts with Petronet and QatarEnergy have dropped to zero due to disruptions linked to the Iran conflict and restrictions on tanker movement through the Strait of Hormuz. In an exchange filing, GAIL stated LNG allocation under the contract has been reduced to zero starting 4 March 2026. The disruption has broader implications for PLNG, GAIL, Gujarat Gas and other gas companies because Ras Laffan closure affects their volumes.

Sources cited in the provided information said the production halt forced cuts in supplies to industries of up to 40%. Reports also noted supply cuts up to 40% for a range of industrial consumers and city gas distribution (CGD) companies. Petronet has reportedly notified its offtakers, including GAIL and Indian Oil Corporation, about the disruption.

What analysts are saying about duration and volume risk

Nomura said Ras Laffan has been on “precautionary force majeure since early March” and that around 40% of Petronet LNG’s volumes are currently unavailable. After the retaliatory attack on Ras Laffan, Nomura said there is increased likelihood of supplies being impacted for at least a few months.

Nomura also said it cut volume estimates for FY27F by 21% assuming no supplies from QatarEnergy for the next four months. The same note said it was not factoring in additional volume impact from use-or-pay customers, estimated at around 32% of total available capacity, because management indicated those volumes were continuing at a normal rate. Separately, Petronet’s management view in the provided information said it would be conservative to assume no supplies from Qatar for at least the next four months.

Market reaction: Petronet LNG shares slide

Petronet LNG shares fell sharply after reports of force majeure and production halts in Qatar. On the BSE, the stock dropped 11.69% to Rs 273, while on the NSE it fell 11.95% to Rs 271.75. The move reflected investor sensitivity to prolonged supply disruption, given Petronet’s role as a major LNG importer and aggregator for Indian gas buyers.

Petronet has also indicated it cannot assess the financial impact at this stage. It added that acts of war are excluded from business interruption insurance coverage, limiting potential claims related to this disruption.

Key facts at a glance

Longer-term contract context: the May 2028 shift

Alongside the crisis-driven disruption, the provided information also references a separate long-term development: QatarEnergy and Petronet signed a 20-year agreement for 7.5 million tons per annum of LNG. QatarEnergy said contracted volumes will be delivered ex-ship to terminals across India starting May 2028. Petronet also stated that the 1999 agreement, under which supply is delivered free on board, expires in 2028.

This timeline matters because it highlights that contract structures and delivery terms are set to change, even as the current force majeure episode tests shipping routes and supply resilience.

What to watch next

Near-term clarity depends on two linked factors: when maritime transit through the Strait of Hormuz becomes safe again, and when force majeure at Ras Laffan is lifted for buyers such as Petronet. Petronet’s management has indicated India-specific trains were not damaged, which could support a faster resumption once restrictions ease. But the stated repair timeline of three to five years for sidelined capacity underscores that parts of Qatar’s system may remain constrained for an extended period.

For Indian buyers, the immediate focus remains on managing contracted shortfalls, monitoring any continuation of “zero” allocations, and tracking official updates from QatarEnergy and Petronet on cargo scheduling for the coming months.