Qatar reported ‘extensive damage’ to its Ras Laffan Industrial City this week as Iran struck energy sites across the Middle East. The state-run gas company had suspended production early in the war — with subsequent strikes reducing LNG output capacity by 17% for five years. The crunch is likely to impact India which imports nearly half its liquefied natural gas requirements from Qatar.
QatarEnergy said in a statement that the strikes had wiped out about 17% of its liquefied natural gas export capacity over the past two days. Two out of 14 LNG trains and one of the two gas-to-liquids facilities were damaged — totalling 12.8 million tons per annum of production. The state-run company said it would likely cost about $20 billion a year in lost revenue and take up to five years to repair — impacting supply to markets in Europe and Asia.
CEO Saad al-Kaabi added that the company would be forced to declare force majeure on long-term contracts for LNG supplies bound for Italy, Belgium, South Korea, and China during this time. Meanwhile India is likely to face a significant indirect and secondary supply crisis.
The attacks also targeted the Pearl GTL (Gas-to-Liquids) facility, a production sharing agreement operated by Shell, that converts natural gas into high-quality cleaner burning drop-in fuels and produces base oils used to make premium engine oils and lubricants, and paraffins and waxes. The damage caused to one of the two trains at Pearl GTL is being assessed and is expected to be offline for a minimum of one year.
What will be the impact for India?
New Delhi imported about 27.8 million metric tonnes of LNG in 2024 — with Qatar supplying 11.30 MMT worth $6.40 billion. , Official 2025-26 data indicates that it remains the primary gas supplier for India. The ongoing Strait of Hormuz blockade and reduced supply could soon affect availability and pricing in the domestic market. The 17% reduction in overall Qatari capacity will also create a global deficit in the coming years, and India might find itself ‘competing’ with Europe and East Asia for the remaining volume. The ‘spot price’ for LNG has also surged sharply as Qatari supplies dwindled.
Ongoing ‘hostilities’ have also triggered cancellations and left India-bound LNG tankers unable to reach the loading port at Ras Laffan (or cross the Strait of Hormuz). Shared infrastructure within the Industrial City was also damaged in the strikes — leading to additional export hurdles.
Damage to the Pearl GTL facility will also be a direct blow to Indian households. This gas-to-liquids facility is the world’s largest plant of its kind and uses specialised technology to turn natural gas into liquid products that are typically made from crude oil. India is the world’s largest importer of base oils — buying a significant quantity from Qatar. These are essential for manufacturing the high-grade synthetic engine oils required by BS-VI compliant vehicles. QatarEnergy has been forced to announce a 50% production cut for the next year, potentially creating severe shortages for companies such as Castrol India, Gulf Oil, and Shell India, and triggering a spike in prices for car and bike lubricants.