<p>Urea plants in India are functioning at half capacity after force majeure declarations disrupted <a href="https://www.deccanherald.com/search?q=LNG">LNG </a>flows through the Strait of Hormuz as tensions in West Asia escalate, <em>PTI </em>reported citing sources. </p><p>India's largest liquefied natural gas receiving terminal, operated by Petronet LNG Ltd, declared force majeure following upstream suppliers cited their inability to deliver contracted volumes amid disruptions to cargoes transiting the <a href="https://www.deccanherald.com/search?q=Strait%20of%20Hormuz">Strait</a>, the report said.</p><p>The move has curtailed supply by state-owned gas distributors GAIL (India) Ltd, Indian Oil Corporation Ltd (IOC) and Bharat Petroleum Corporation Ltd (BPCL), which supply gas under RasGas contracts to fertiliser units across the country.</p>.Govt guarantees at least 70% natural gas supply to fertiliser plants amid West Asia crisis.<p>"Gas supplies have been curtailed to approximately 60-65 per cent of normal levels," a senior industry official told <em>PTI</em>, adding that effective supply at some units had fallen below 50 per cent of the scheduled plant turnarounds over the past six months.</p><p>Urea production at affected plants has dropped by 50 per cent, but energy consumption at these plants have increased by 40 per cent as large ammonia-urea trains running at reduced loads suffer a sharp deterioration in thermal efficiency, according to plant officials.</p><p>"Plants of this scale are not designed to ramp up and down at will," one plant operations manager told <em>PTI</em>. </p><p>"Operating under these conditions means you are burning more energy to produce less fertiliser, and that is a direct financial hit." </p><p>The situation has worsened by what fertiliser company officials described as a breakdown in operational coordination. </p><p>Following Ras Laffan LNG Company's force majeure invocation, gas consumption mandates have at times been communicated to fertiliser units late at night, leaving plant managers scrambling to make abrupt load adjustments.</p><p>"Sudden load variations of this nature are not practically feasible for large train-based ammonia-urea plants," another industry source told <em>PTI</em>. </p><p>"They risk equipment failures, plant tripping and, most critically, safety risks to operating personnel." </p><p>Plants were compelled to overdraw gas allocations momentarily to keep operations within safe parameters.</p><p>Another complication has occurred on the pricing front. GAIL informed fertiliser companies by letter dated March 15 that long-term RLNG quantities would henceforth be invoiced at multiple price points, including contract price, GAIL Pooled Price and Gazette Pooled Price, effective March 1, 2026.</p><p>The pooled price, the report said, is provisional and subject to retrospective reconciliation under applicable government guidelines, introducing an additional layer of financial uncertainty for producers already absorbing production losses.</p><p>India is among the world's largest consumers of urea, and a sustained domestic shortfall could affect fertiliser availability ahead of the upcoming kharif sowing season, analysts noted.</p><p>As of March 19, India has a total urea stock of 61.14 lakh tonne, higher than 55.22 lakh tonne in the year-ago period. </p>
<p>Urea plants in India are functioning at half capacity after force majeure declarations disrupted <a href="https://www.deccanherald.com/search?q=LNG">LNG </a>flows through the Strait of Hormuz as tensions in West Asia escalate, <em>PTI </em>reported citing sources. </p><p>India's largest liquefied natural gas receiving terminal, operated by Petronet LNG Ltd, declared force majeure following upstream suppliers cited their inability to deliver contracted volumes amid disruptions to cargoes transiting the <a href="https://www.deccanherald.com/search?q=Strait%20of%20Hormuz">Strait</a>, the report said.</p><p>The move has curtailed supply by state-owned gas distributors GAIL (India) Ltd, Indian Oil Corporation Ltd (IOC) and Bharat Petroleum Corporation Ltd (BPCL), which supply gas under RasGas contracts to fertiliser units across the country.</p>.Govt guarantees at least 70% natural gas supply to fertiliser plants amid West Asia crisis.<p>"Gas supplies have been curtailed to approximately 60-65 per cent of normal levels," a senior industry official told <em>PTI</em>, adding that effective supply at some units had fallen below 50 per cent of the scheduled plant turnarounds over the past six months.</p><p>Urea production at affected plants has dropped by 50 per cent, but energy consumption at these plants have increased by 40 per cent as large ammonia-urea trains running at reduced loads suffer a sharp deterioration in thermal efficiency, according to plant officials.</p><p>"Plants of this scale are not designed to ramp up and down at will," one plant operations manager told <em>PTI</em>. </p><p>"Operating under these conditions means you are burning more energy to produce less fertiliser, and that is a direct financial hit." </p><p>The situation has worsened by what fertiliser company officials described as a breakdown in operational coordination. </p><p>Following Ras Laffan LNG Company's force majeure invocation, gas consumption mandates have at times been communicated to fertiliser units late at night, leaving plant managers scrambling to make abrupt load adjustments.</p><p>"Sudden load variations of this nature are not practically feasible for large train-based ammonia-urea plants," another industry source told <em>PTI</em>. </p><p>"They risk equipment failures, plant tripping and, most critically, safety risks to operating personnel." </p><p>Plants were compelled to overdraw gas allocations momentarily to keep operations within safe parameters.</p><p>Another complication has occurred on the pricing front. GAIL informed fertiliser companies by letter dated March 15 that long-term RLNG quantities would henceforth be invoiced at multiple price points, including contract price, GAIL Pooled Price and Gazette Pooled Price, effective March 1, 2026.</p><p>The pooled price, the report said, is provisional and subject to retrospective reconciliation under applicable government guidelines, introducing an additional layer of financial uncertainty for producers already absorbing production losses.</p><p>India is among the world's largest consumers of urea, and a sustained domestic shortfall could affect fertiliser availability ahead of the upcoming kharif sowing season, analysts noted.</p><p>As of March 19, India has a total urea stock of 61.14 lakh tonne, higher than 55.22 lakh tonne in the year-ago period. </p>