New Delhi: India is stepping up plans to expand LNG storage capacity after disruptions from the West Asia conflict exposed limits in its ability to handle supply shocks, Petronet LNG CEO AK Singh said. The disruption hit flows from Qatar and the UAE — which together account for about 40 percent of India’s LNG imports — forcing the country to scramble for alternative cargoes even as domestic demand remained intact.
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Petronet LNG is now planning additional storage infrastructure across key locations, as part of a broader push to build resilience. The company is working on new tanks at Gopalpur, Kochi and Dahej, with seven tanks in total under consideration. These projects are expected to be completed over the next three years.
The move also runs parallel to discussions at the national level on creating strategic LNG reserves to manage future disruptions.
India’s current storage network, Singh indicated, is designed for smooth operations rather than crisis scenarios. “We have a very good buffer but supply and drawal should synchronise. We have sufficient tanks for operational reasons but not for emergencies like war,” he said. Petronet currently operates 10 of India’s 23 LNG tanks, which together handled 26.5 million tonnes of imports in FY26.
The most immediate impact has come from Qatar, India’s largest LNG supplier, where shipments have been disrupted since early March. “No cargoes arrived in March or April, with May also expected to be affected,” Singh said, adding that June supplies remain uncertain and hinge on how the situation evolves. Petronet typically receives 9–10 cargoes a month from Qatar. The disruption has effectively reduced that to zero over the past two months.
Logistical disruptions have added to the supply strain. A Petronet vessel, Disha, was stranded after transit through the Strait of Hormuz was halted, underlining the vulnerability of key shipping routes during geopolitical conflict. Despite this, Singh said upstream facilities in Qatar remain intact and supplies are expected to resume once conditions stabilise.
To manage the shortfall, supplies have been redirected towards priority segments such as household cooking gas and CNG for transport. Industrial users have borne the brunt of the cuts, reflecting the government’s prioritisation strategy during periods of constrained availability.
The disruption triggered a sharp spike in spot LNG prices to about USD 24–25 per mmBtu, before easing to around USD 16. Singh said India’s gas demand remains highly price-sensitive, influencing procurement decisions.
The company “is not advocating more long-term contracts today and will watch prices,” he said, signalling a preference for opportunistic spot purchases rather than locking in high-cost supply.
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The supply shock has interrupted what had been a strong start to the year. “We handled almost 27 cargo or 28 cargo in January. So definitely, January and February were fantastic. It was happening, had this crisis not happened in March, we would have broken all the records,” Singh said.
The disruption has since shifted the focus from growth to resilience, with storage emerging as a key gap in India’s gas strategy.
