South Asian factories shut as Qatar gas supply disruption spreads
Industrial production across parts of South Asia has begun to slow or halt after the suspension of liquefied natural gas output in Qatar disrupted fuel supplies to major manufacturing and fertilizer sectors in India and Pakistan.
The shutdown followed Iranian drone strikes on energy infrastructure at Ras Laffan, the world’s largest LNG export complex. The disruption has rippled through energy markets and exposed the heavy dependence of several Asian economies on Qatari gas imports.
Fertilizer producers in India have already started reducing output as gas supplies tighten. According to Bloomberg, prolonged disruptions could force temporary shutdowns at several urea plants.
India is one of the largest consumers of urea globally, and its fertilizer industry relies heavily on imported LNG as a key feedstock. The country currently holds roughly two months of reserve urea stocks, but industry officials warn that an extended shortage of gas could halt plant operations just as farmers prepare for the summer sowing season and the kharif monsoon crop cycle.
In Pakistan, Agritech Limited announced an indefinite closure of its urea plant in Mianwali after Sui Northern Gas Pipelines Limited halted RLNG supplies starting March 4. The company said the suspension followed a force majeure declaration by the LNG supplier linked to the escalating Middle East conflict.
Pakistani energy authorities are attempting to restore about 350 million cubic feet per day of reduced domestic gas production while exploring emergency purchases through SOCAR Trading Company to compensate for lost imports.
The crisis has also hit India’s manufacturing sector. The Morbi district in Gujarat, the world’s second largest ceramic manufacturing hub, faces the prospect of a widespread shutdown if gas shortages continue.
Local gas distributor Gujarat Gas has cut natural gas supply to the industry by roughly 50 percent. Deliveries of propane and LNG, which many ceramic producers rely on to fuel kilns, have nearly stopped.
Morbi’s ceramic sector includes more than 500 units dependent on propane and roughly 150 to 200 facilities operating on natural gas. The industry consumes around 2.5 million cubic meters of natural gas and about 5.5 million cubic meters of propane daily.
Manoj Arvadiya, president of the Morbi Ceramic Manufacturers Association, warned that the entire industry could be forced to shut down if gas supplies remain insufficient. Industry leaders say propane inventories are expected to last only until March 5.
The disruption has also raised concerns among India’s city gas distribution companies. Qatar supplies about 40 percent of India’s annual LNG imports, which total roughly 27 million tonnes.
Major importers such as Petronet LNG and GAIL are now exploring spot market tenders to secure replacement cargoes. However, spot LNG prices have surged to around $25 per million British thermal units, roughly double the price of long term contract supplies.
In a letter dated March 3 to GAIL, the Association of CGD Entities warned that reduced allocations of low cost gas could significantly affect fuel availability for the sector. Operators say sustained high prices may weaken the competitiveness of compressed natural gas and push consumers toward electric vehicles.
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