Petronet Plans US LNG Imports in New Long-term Qatar Agreement

Petronet LNG Ltd, India's leading importer of liquefied natural gas (LNG), is exploring options to include US-sourced LNG under its renewed long-term supply contract with Qatar. This move aims to broaden India's LNG import sources following disruptions caused by the conflict in Iran and related Middle Eastern tensions.

Currently, Qatar is India's largest LNG supplier, providing 7.5 million metric tons annually to Petronet under a contract set to expire in April 2028. The two parties recently agreed to extend this agreement for an additional 20 years, up to 2048, with Qatar continuing to deliver LNG cargoes directly to India.

During an analyst call on Tuesday, Vivek Mittal, group general manager at Petronet LNG, confirmed ongoing discussions with Qatar about diversifying the supply portfolio under the renewed contract. "Definitely we have had some discussion with Qatar to diversify supply under the renewed contract, which will start in 2028," Mittal stated. He added that Qatar is open to considering India's request to source a portion of LNG volumes from alternative suppliers, including those in the United States.

Such diversification is a strategic response to the recent geopolitical upheaval in West Asia. In March, QatarEnergy declared force majeure on its LNG supplies after the Iran conflict triggered a blockade of the Strait of Hormuz and resulted in attacks on Qatar's Ras Laffan facilities. This force majeure remains in effect through December, causing supply uncertainties for buyers like Petronet.

The instability has accelerated India's efforts to secure LNG from various global sources. Beyond Qatar, India has been increasing imports from the United States, Oman, Nigeria, Angola, and Australia. These efforts aim to ensure stable and diversified gas supplies critical for energy security and economic growth.

QatarEnergy itself has been expanding its supply agreements with US producers. In March, it signed a 20-year deal to purchase 3 million metric tons per year from Woodside's US LNG plants, with deliveries expected to commence in 2030. Additionally, it has agreements with Cheniere Energy to source up to 4 million metric tons annually through 2054 from the Sabine Pass and Corpus Christi facilities.

Petronet has also adjusted its fleet management amid the supply issues. The company has suspended time charter agreements for three LNG tankers due to the ongoing force majeure impacting supplies from Qatar.

The renewed contract and potential inclusion of US LNG reflect India's growing need to secure reliable and diverse energy sources. As the global LNG market evolves, India's partnerships with established and emerging suppliers will play a key role in meeting its rising demand for natural gas.

Petronet LNG, established in 1998, is a joint venture between several state-owned entities and plays a central role in importing, regasifying, and distributing LNG across India. The company’s efforts to broaden its supply mix align with national policies focused on expanding clean energy consumption and reducing dependence on any single source or region.

The combination of geopolitical risks and increasing domestic energy needs underlines why India is actively pursuing multiple LNG suppliers. By negotiating flexibility within its long-term deals and engaging with diverse producers, India aims to strengthen its energy resilience in a changing international landscape.