Expert's Caution As India Faces Possible Gas Crunch After Qatar Halts Production

India's top liquefied natural gas importer has warned of disruptions in some operations because of the war in the Middle East, sparking concerns of tighter supplies in New Delhi.

QatarEnergy -- which suspended LNG production earlier this week -- is a key supplier for the Indian importer.

Qatar's state-run energy firm on Tuesday announced that it has "ceased production of liquefied natural gas (LNG) and associated products" post the military attacks on its operating facilities in Qatar.

Energy supply concerns heightened after Iran blocked the Strait of Hormuz, a key shipping route for international trade.

India depends on the region for a large share of its crude oil and LNG imports, although it has diversified its sourcing in recent years with substantially higher volumes from Russia.

"India imports 50% of its gas needs from the international market. About 40% of this LNG is purchased from Qatar. About 20% of India's total LNG imports come from Qatar. India will have to reduce gas consumption, especially in industry, and reduce gas use in the power sector," Dr Kirit Parekh, India's leading oil and gas sector economist, told NDTV.

"In this situation, we could increase the use of coal for power generation, but this would be more expensive. India has good potential to increase power generation; the electricity sector will not be significantly affected. However, for entrepreneurs who run their industries on gas, where gas is a critical resource, it will be important to use gas judiciously and economically," the economist, who was head of the Expert Group setup by Government in 2022 to review India's domestic natural gas pricing formula, said.

The economist further explained that "our petroleum companies use a lot of gas to produce hydrogen", adding that electricity can be used to produce that.

"But this is a much more expensive option," he cautioned.

Following the outbreak of hostilities in the Middle East and the evolving global energy situation, Minister of Petroleum & Natural Gas, Hardeep Singh Puri, informed that "the country is well stocked with crude oil and inventories of key petroleum products including petrol, diesel and ATF to deal with short-term disruptions arising from the Middle East."

The Ministry has also established a 24x7 Control Room to continuously monitor the supply and stock position of petroleum products across the country.