Energy shift: Shell emerges top LNG supplier to India after Qatar supply shock

Global energy major Shell plc has significantly increased liquefied natural gas (LNG) supplies to India, stepping in to bridge a critical gap triggered by disruptions in West Asia, according to a report by PTI. 

The company has leveraged its vast global LNG portfolio to capture a larger share of both spot and term demand, particularly in the fertiliser sector, where uninterrupted gas supply is crucial for urea production. Sources said Shell emerged as a leading supplier in last month’s bulk LNG procurement by Indian fertiliser firms, securing 4 trillion British thermal units (TBtus) out of the 6 TBtus tendered. 

The surge in Shell’s role comes at a time when supplies from QatarEnergy — India’s largest LNG supplier — were disrupted due to the ongoing West Asia conflict. In response, Shell’s India arm imported its highest-ever monthly LNG volumes in March, positioning itself as the country’s top supplier of imported gas during the period. 

Beyond fertiliser companies, Shell India also catered to industrial users and retailers, helping stabilise energy availability across sectors, the report added. Its ability to scale up supplies rapidly is underpinned by its 5 million tonnes-per-year LNG import terminal at Hazira in Gujarat, along with extensive storage infrastructure and one of the world’s largest LNG portfolios. 

Shell sourced cargoes from multiple regions, including Oman, Australia, and Nigeria, reducing reliance on the Gulf. The company’s access to a fleet of over 65 chartered LNG carriers further enabled it to navigate global shipping constraints and quickly divert supplies to India. 

India imports roughly half of its natural gas requirement, with nearly 45-50 per cent traditionally sourced from Qatar under long-term contracts. However, these supplies were halted after geopolitical tensions escalated following Iran’s retaliation to US and Israeli strikes in the region, impacting countries hosting American troops. 

The resulting force majeure declared by QatarEnergy disrupted about 11.2 million tonnes of India’s total LNG imports of around 27 million tonnes. State-run GAIL (India) Limited and other firms sought alternative supplies from countries such as the United States and Russia, though logistical challenges — particularly limited LNG shipping capacity — posed hurdles. 

In contrast, Shell remained relatively insulated from such constraints due to its integrated portfolio and shipping capabilities, allowing faster response times. 

The additional LNG volumes brought in by Shell, alongside limited imports by GAIL and others, complemented India’s domestic gas production of about 92 million standard cubic metres per day. This helped stabilise supply more quickly compared to other fuels like LPG, following the early March disruption. 

Initially, gas allocations were prioritised for fertiliser plants and city gas distribution networks, leading to supply cuts of up to 40 per cent for some industrial consumers. However, as alternative cargoes arrived, supplies were gradually restored. 

Gas availability to operating urea plants improved from around 70 per cent to nearly 90 per cent by April 6, and further to approximately 95 per cent by April 9. Supplies to other industrial and commercial users, including city gas networks, were also increased by an additional 10 per cent starting April 6. 

Sources indicated that elevated LNG imports by Shell are likely to continue through April. The company is also expected to play a major role in upcoming fertiliser sector tenders for 10-12 TBtus of gas supply scheduled for mid-April, further consolidating its position in India’s energy market amid ongoing global uncertainties, PTI reported.