Mumbai: Oil and gas companies have informed industrial customers of a possible disruption in propane and natural gas supply after Qatar halted production, said two industry insiders aware of the development.
Piped natural gas supplied for cooking is domestically produced and its supplies to homes will not be affected, they said.
QatarEnergy on Monday suspended production of liquefied natural gas (LNG) following a drone attack from Iran at its energy facility in Ras Laffan. It is the world’s largest LNG producer. Developments in the West Asia have also disrupted oil and gas shipments through the Strait of Hormuz, pushing up global energy prices as well as shipping and insurance costs.
“IndianOil, which supplies propane to ceramic factories in Morbi, has communicated to us that they have propane supplies only for three days. If the situation does not improve in West Asia, there may be supply cuts,” said the promoter of a ceramic unit based at the Gujarat industrial town.
Gujarat Gas, a supplier of piped natural gas to the industry, has also warned of disruptions, he added. The ceramics industrial cluster in Morbi has 650 units. Companies including Reliance Industries, Bharat Petroleum Corporation and Aegis Logistics also supply propane to Gujarat’s industrial clusters. IOC is the largest, supplying 65 per cent of the units.
IOC did not reply till press time Tuesday to an email seeking comment. India is the world’s fourth-largest buyer of LNG and relies heavily on West Asia for its hydrocarbon imports. An industry executive said the country’s largest gas producer, GAIL, is watching the situation and has informally communicated to its staff that the company may focus only on production of liquid hydrocarbons (propane, naphtha and pentane) and LPG. GAIL also makes petrochemicals, production of which may take a back seat until the situation normalises. GAIL did not respond to an email seeking comment.
