Sources: India cuts gas supply to industries following Qatar outage

Four industry sources said that Indian companies reduced their natural gas supply to industries on Tuesday in anticipation of a 'tighter supply' from the Middle East, after Qatar, the top producer, halted its production.

Qatar stopped its production of liquefied gas on Monday as Iran continued to attack Gulf countries in response to Israeli and U.S. attacks against it. The attacks have also caused a halt to oil and gas shipping through the Strait of Hormuz and increased?global energy costs and shipping fees.

India, which is the fourth largest LNG buyer in the world, relies heavily on Middle East imports.

Two sources said that the top LNG importer Petronet LNG Ltd informed GAIL India,?the leading gas marketing company?, about a decrease in supplies.

The South Asian nation has been the largest LNG customer of Abu Dhabi National Oil Company, and is also the second biggest buyer of Qatari LNG.

GAIL and Indian Oil Corp informed their customers late Monday of the gas shortage, a source said.

Two sources have said that the cuts are between 10% and 30%.

Sources said that the cuts were set at minimum 'lifting quantities' to protect suppliers from penalties imposed by customers on the basis of contractual terms.

GAIL, Petronet, and IOC did not respond to requests for immediate comment. The sources declined to name themselves because they weren't authorised to talk to the media.

Two sources say that companies such as?IOC GAIL Petronet LNG plan to issue spot tenders in order to make up for the LNG shortage, despite the fact that spot prices, freight and insurance costs are on the rise.

(source: Reuters)