Petronet LNG Ltd is fast-tracking plans to expand LNG storage capacity and diversify sourcing as supply disruptions from Qatar — India’s largest LNG supplier — continue to impact cargo inflows since early March.
The company plans to scale up infrastructure beyond its existing 10 LNG storage tanks, with proposals to add seven more tanks — four at Dahej, one at Kochi and two at the upcoming Gopalpur terminal — to strengthen supply resilience. However, officials indicated that new tank construction could take up to three years, while strategic underground storage may require a longer gestation period.
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Zero Cargoes from Qatar
The expansion push comes amid a complete halt in LNG supplies from Qatar due to disruptions in the Strait of Hormuz. Petronet, which imports 7.5 million tonnes per annum (mtpa) under a long-term contract with QatarEnergy, has not received any cargo since March 2.
With one cargo vessel still stranded in the region, the company said supply resumption will depend on stabilisation of the geopolitical situation.
The disruption has accelerated India’s shift towards diversifying LNG procurement. Petronet said the country already has over 30 mtpa of long-term contracts, with an additional 10–12 mtpa signed in the past 18 months, reflecting a move to reduce reliance on a single geography.
Price Volatility
The supply crunch has also driven price volatility, with spot LNG prices rising to $24–25 per mmbtu before moderating to around $16, in line with elevated crude oil prices.
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Despite supply constraints, domestic demand is being managed through prioritisation. Fertiliser and city gas distribution (CGD) sectors continue to receive assured supplies, while industrial consumers are switching to alternative fuels.
Petronet, which accounts for nearly 75% of India’s LNG imports, said demand remains sensitive to price movements, with consumption expected to rise once prices ease.
TOPICSLNGPetronet LNG LimitedThis article was first uploaded on May four, twenty twenty-six, at thirty-five minutes past seven in the evening.