Sources: India cuts gas supply to industries following Qatar outage

Four industry sources with knowledge of the situation said that Indian companies reduced their natural gas supply to industries on Tuesday in anticipation of a tighter Middle East supply after top producer Qatar stopped 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. These attacks have also stopped oil and gas shipments through the Strait of Hormuz. This has pushed up energy prices globally and increased shipping costs.

India is the fourth largest LNG buyer in the world. It imports a large amount of LNG from the Middle East.

Two sources said that Petronet LNG Ltd, the largest LNG importer, had informed GAIL India, the leading gas marketing company in India, about the lower supply.

South Asia is the largest LNG buyer for Abu Dhabi National Oil Company, and second in terms of buying 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 amounts?that would protect the suppliers from penalties imposed by the customers based on contract?terms.

GAIL, Petronet and IOC did not respond to requests for immediate comment. Sources declined to be identified because they weren't authorised to speak with the media.

Two sources say that to make up for LNG shortages, IOC, GAIL and?Petronet LNG plan to issue spot tenders. However, spot prices, shipping costs, and insurance have risen.

(source: Reuters)