Adani-Total Gas triples industrial gas price as West Asia conflict disrupts LNG supplies

New Delhi: Adani Total Gas Ltd, the city gas joint venture of Adani Group and France’s TotalEnergies, has nearly tripled gas prices for large industrial consumers after disruptions to LNG supplies triggered by the West Asia conflict halting shipping through the Strait of Hormuz, sources said.

The company raised industrial gas prices to about Rs 119 per standard cubic metre from Rs 40, according to a company memo cited by sources, as it tapped costlier alternative supplies following curbs in contracted LNG availability.

Shipping through the Strait of Hormuz — the narrow sea lane that carries about one-fifth of the world’s oil and large volumes of liquefied natural gas (LNG) — has slowed to a near halt following US and Israeli attacks on Iran and Tehran’s retaliatory strikes.

Qatar shut down the LNG plant after it came under drone and missile attack. Indian buyers could not send ships to Qatar because shipping through the Strait of Hormuz — the narrow waterway between Iran and Oman — remains effectively shut.

With LNG supplies from QatarEnergy, India’s largest gas supplier, disrupted, supply cuts have been imposed on several industrial users and city gas distribution companies.

Consumers affected by the curbs have increasingly turned to alternative fuels that cost more than twice the normal rate.

“Due to recent geopolitical developments impacting LNG supply routes, ATGL has received upstream gas curtailment, leading to operational constraints,” the company said, explaining the steep price increase.

Countries in the Middle East account for roughly 30 per cent of global crude oil and 20 per cent of global LNG production, most of which transits the Strait of Hormuz.

India imports about 88 per cent of its crude oil and around half of its LNG, with 40-50 per cent of crude oil and 50-60 per cent of LNG shipments routed through the corridor, which is roughly 21 nautical miles wide at its narrowest point, with the shipping lanes even narrower — two 2-mile-wide channels separated by a 2-mile buffer.