Iran-US conflict disrupts LNG supply; gas cuts may hit fertiliser production at NFL plants in Punjab

Escalating tensions between Iran and the United States are likely to impact fertiliser production in India, with gas supplies to key fertiliser plants already being curtailed following disruptions in liquefied natural gas (LNG) supply from Qatar.

According to highly placed sources, Qatar, which supplies nearly 60 per cent of India’s LNG through companies such as Indian Oil and Petronet, has temporarily disrupted supplies after energy infrastructure in Iran was reportedly attacked amid the ongoing conflict.

Following the disruption, the Gas Authority of India Limited (GAIL), which distributes LNG across the country, has reduced gas supplies to National Fertilisers Limited (NFL) plants located at Nangal in Ropar district and Bathinda in Punjab.

Sources said the gas supply was initially reduced by about 10 per cent, but the reduction may increase to as much as 40 per cent in the coming days if the situation persists.

BB Grover, Chief General Manager (CGM) of the NFL plant at Nangal, confirmed the reduction in gas supply. “GAIL has cut LNG supply to the NFL plant by around 10 per cent. After the cut in supply, we have scaled down our production accordingly,” Grover said.

He added that the situation could worsen if the proposed further reduction takes place. “We have been informed that the supply may be cut up to 40 per cent. If that happens, it will become extremely difficult to run the plant. We are taking up the matter with our corporate office, he said.

Officials said NFL plays a crucial role in fertiliser production in the country. The company accounts for nearly 25 per cent of the total urea produced in India. Any significant reduction in production at its plants in Punjab could therefore affect fertiliser availability during the upcoming kharif season.

Agriculture experts said that urea is a critical input for farmers during the kharif season, when crops such as paddy, maize and cotton are sown. A shortage of fertilisers during this period could impact agricultural productivity in several states, they said.

Sources in the fertiliser sector said the Union Government may explore the option of importing additional urea from countries such as China and Russia to offset any shortfall in domestic production.

Officials also indicated that the government is prioritising the supply of piped natural gas meant for domestic use over LNG supplies to industrial units.

According to sources, LNG supplies to commercial and industrial plants may face further cuts as the government attempts to ensure uninterrupted gas supply to households.

Liquefied Natural Gas (LNG) is natural gas cooled to extremely low temperatures of about minus 162 degrees Celsius, converting it into liquid form. This process significantly reduces its volume, making it easier to transport over long distances by specialised cryogenic ships and storage tanks.

After reaching import terminals in India, LNG is converted back into gas through a process known as regasification and is then supplied to industries such as fertiliser plants, power stations and the heavy transport sector.

Earlier, NFL’s fertiliser plants used coal as the primary fuel for production. However, about a decade ago, the plants switched from coal to LNG as part of efforts to adopt a cleaner and more environmentally friendly fuel. The transition significantly reduced pollution levels and improved energy efficiency at the plants.