Shell Emerges Key LNG Supplier to India After Gulf Supply Disruptions

Shell plc raised LNG supplies to India after disruptions in West Asia affected regular imports, as per PTI reports. India imports nearly half of its natural gas needs, with a significant share usually sourced from Qatar under long-term contracts. 

The disruption followed force majeure declared by QatarEnergy, affecting around 11.2 million tonnes out of India’s total annual LNG imports of about 27 million tonnes. This led to a shortfall across key consuming sectors. 

Fertiliser Tenders Drive Demand 

To maintain urea production, fertiliser companies issued bulk tenders for gas procurement. Industry reports suggest that Shell supplied 4 trillion British thermal units (TBtu) out of 6 TBtu tendered in the latest round. 

Gas supply to fertiliser plants was prioritised. Availability improved from roughly 70% of requirement to about 90% by 6 April, and further to nearly 95% by 9 April as additional cargoes were secured. 

Supply Constraints and Sourcing Shifts 

GAIL (India) Limited and other buyers sourced cargoes from the United States and Russia. However, shipping remained a constraint, with transit times from the US extending up to 45 days and limited LNG carrier availability. 

During the initial phase, industrial consumers saw supply cuts of up to 40% as gas was diverted to priority sectors such as fertilisers and city gas distribution networks. 

Shell Scales Up Imports and Distribution 

Shell increased imports using its global LNG portfolio, sourcing cargoes from regions including Oman, Australia and Nigeria. Its Hazira terminal in Gujarat, with a capacity of 5 million tonnes per year, supported higher intake. 

In March, the company became the largest supplier of imported gas to India. Supplies were directed to fertiliser units, industrial consumers, and city gas distributors. 

Gradual Recovery in Availability 

From early April, allocations to industrial and commercial users were raised by around 10% as supply conditions improved. Domestic production, estimated at about 92 million standard cubic metres per day, also contributed to stabilising availability. 

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Conclusion 

Higher imports helped address the immediate supply gap caused by the disruption. Further tenders of 10-12 TBtu expected in April indicate continued demand for spot LNG cargoes. 

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