Asian spot LNG prices have flared up from $10/mmBtu to $24–25/mmBtu
Consequent to the geopolitical developments, Asian spot LNG prices have flared up from $10/mmBtu to $24–25/mmBtu. Qatar supplies 10-11 MTPA of LNG to India, almost 45 per cent of its imports. India has long-term contracts with Qatar, US, Russia, Australia and the UAE, among others.
LNG terminals
According to information available, India operates eight major LNG terminals with a combined nameplate regasification and storage capacity of about 52.7 MMTPA (million metric tonnes per annum). Informed sources said India holds about 21 days of LNG inventory, including stocks in transit.
Sources said the Indian government is working on mandating all LNG terminals to maintain an additional 10 per cent storage capacity beyond day-to-day requirements.
“LNG prices could soar further unless Qatar resumes production and the Strait of Hormuz is secured by multinational military forces soon for tankers to move back and forth safely,” said energy expert Narendra Taneja.
“As of now, LNG is available from other sources and in spot markets but the prices are much higher. The issue is price, not so much about availability. But even availability may become a challenge if the war lingers on for longer than 15 days from now and Iran starts mining the Strait of Hormuz,” he said adding that “there are massive challenges for all big Asian LNG importers and India is no exception”.
Following the LNG production halt in Qatar, Petronet LNG Ltd, India’s major LNG terminal operator, has also issued force majeure notices to offtakers because its vessels cannot safely navigate the Strait of Hormuz to reach loading ports. This may lead to major gas marketers such as GAIL (India) Ltd reworking their supply to customers in priority order.
According to Kpler, if the prevailing situation continues, India is likely to face higher replacement costs for LNG cargoes, forcing buyers to either procure higher-priced spot volumes or curtail consumption.
While Gujarat Gas Ltd has issued force majeure notices to its industrial customers, restricting gas supply quantities, Mahanagar Gas Ltd (MGL) said it is not facing any reduction in gas availability at present.
“In case gas supplies to MGL are curtailed due to problems in LNG import, there could be some impact on gas supply to MGL’s industrial and commercial customers. This, however, would be mitigated as almost all of these customers have recourse to alternative hydrocarbon fuels such as FO, LSHS, LDO, LPG etc,” it said.
No implication
Indraprastha Gas Ltd, according to sources, does not see any immediate implications. However, a source was quick to point out that the dynamics will vary depending on whether the city gas distribution entity has more of industrial and commercial customers or domestic. Besides, gas required to meet domestic household supplies comes from domestically produced gas. Similarly, a majority of the gas required for CNG supply is also domestically produced.
According to Sehul Bhatt, Director, Crisil Intelligence: “Elevated LNG prices can also translate to costlier gas supplies to fertiliser plants. This, in turn, can increase the government’s subsidy burden.”
Published on March 4, 2026