Shell Emerges as Top LNG Supplier Following Gulf Disruption, Fills India's Gas Gap

Shell Emerges as Key Supplier of Natural Gas to India Amid West Asia Conflict

Global energy major Shell plc has significantly increased its natural gas supplies to India, leveraging its global liquefied natural gas (LNG) portfolio to capture a larger share of spot and term demand. The company has emerged as a leading supplier in last month's bulk LNG procurement by Indian fertiliser companies, securing a supply of 4 trillion British thermal units out of 6 TBtus volumes tendered. This move is a result of the West Asia conflict, which has disrupted supplies from the Gulf, particularly from India's largest LNG supplier in Qatar.

Shell's India arm has stepped up to the challenge, importing its largest-ever monthly LNG volumes in March. Besides supplying gas to fertiliser companies, Shell India also supplied gas to other industrial users and retailers. In March, it became India's largest supplier of imported gas. This achievement is backed by Shell's 5 million tonnes-per-year LNG import terminal at Hazira in Gujarat and associated storage infrastructure, as well as its position as the world's largest LNG portfolio player.

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India imports roughly half of its natural gas requirement, which is used as feedstock for fertiliser production, power generation, CNG for transport, piped cooking gas for households, and across a range of industrial applications. However, a key constraint remained shipping capacity, with a limited number of LNG carriers available to transport cargoes from distant sources, such as the US, where voyages can take up to 45 days. Shell, sources said, was relatively insulated from such constraints due to its access to a global LNG portfolio, as well as its own shipping fleet, enabling quicker diversion of cargoes.

Supplies brought in by Shell, along with limited volumes imported by GAIL (India) Limited and other state-run firms, complemented domestic production of about 92 million standard cubic metres per day, helping stabilise gas availability more quickly than LPG, following the disruption in early March. Initially, gas supplies were curtailed for some industrial users to prioritise fertiliser plants and city gas distribution, before gradually restoring allocations as alternative cargoes were secured. Industrial consumers faced supply cuts of up to 40 per cent.

With additional imports in March, supplies to operating urea plants were progressively ramped up - from about 70 per cent of the requirement to nearly 90 per cent from April 6 and around 95 per cent from April 9. Starting April 6, gas availability to other industrial and commercial sectors, including City Gas Distribution networks, was also increased by an additional 10 per cent. Sources said elevated imports by Shell are likely to continue in April as well. It is likely to be a major bidder in the 10-12 TBtu of gas supply tender that fertiliser firms are planning to bring in mid-April.