India’s LNG buyers eye flexi deals to cut risks after Iran war hit Qatar supply

India’s liquefied natural gas (LNG) buyers are increasingly seeking greater flexibility in long-term supply deals after the Iran war disrupted shipments through the Strait of Hormuz, almost halting imports from Qatar, the country’s largest supplier.

Gujarat Energy Ltd signed an agreement with the UAE’s ADNOC last week to procure 4 million tonnes of LNG over ten years, starting in 2028, from the latter’s international gas portfolio.

Petronet LNG is negotiating with QatarEnergy to include US-sourced LNG in a renewed 20-year supply contract scheduled to begin deliveries in 2028, a Petronet official said.


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The existing contract restricts supplies to a facility in Qatar, leaving India exposed to regional disruptions. Including QatarEnergy’s US supplies would provide an alternative source and reduce that vulnerability.

Under portfolio contracts, suppliers are legally obligated to source replacement cargoes from their global network if their primary production facility shuts down, protecting buyers from disruptions at any single facility or along a specific shipping route.

Indian buyers already have portfolio contracts with some major oil and gas companies and traders.

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However, the bulk of their contracted supplies remains linked to fixed sources such as Qatar, the US and Australia, leaving them with limited flexibility.

Data from commodity analytics firm Kpler shows that portfolio LNG deliveries to India ramped up during March-September, helping fill the gap left by traditional supply contracts and underscoring the value of sourcing flexibility during the Iran war.

“Estimated portfolio deliveries increased by around 3.6 mt year-on-year (about 161%), while estimated spot purchases rose by 35%, helping India maintain imports despite the disruption,” said Sonal Ranjan, LNG & natural gas market analyst at Kpler.

Under Kpler’s methodology, a portfolio refers to cargoes matched to supply agreements with a fixed destination but flexibility over the supply origin, she said.

War-fuelled Supply Concerns

The shift towards portfolio contracts is part of a broader transformation in the global LNG industry, accelerated by the US-Israeli war against Iran that broke out on February 28, industry executives said.

For the first four decades of the industry, until the early 2000s, contracts were largely tied to fixed sources and destinations. This changed in the 2010s, when the US emerged as a major LNG exporter, enabling flexible-destination contracts and free-on-board supplies. Buyers are now increasingly negotiating portfolio deals that offer flexibility over both supply sources and destinations.

Portfolio contracts, however, do not guarantee uninterrupted supplies. After the outbreak of the Ukraine war in February 2022, SEFE (a former German unit of Russia’s Gazprom) failed to honour its portfolio supply contract for several months and later reached a settlement after GAIL initiated arbitration.

“For India, diversification across both suppliers and contract structures matters—source-specific contracts can provide a stable supply base, while portfolio and destination-flexible contracts provide additional options when individual sources or routes are disrupted,” Ranjan said.

Petronet has a 7.5 million tonnes per annum contract to receive LNG from a facility in Qatar. Originally due to expire in 2028, it was renewed two years ago for another 20 years. Following the disruption of shipping through the Strait of Hormuz and attacks on its liquefaction facilities, Qatar declared force majeure and stopped supplying cargoes under the contract.

The renewed contract would leave India similarly exposed to regional disruptions.

However, negotiations with Qatar to include supplies from other sources could help reduce that vulnerability.