Qatar- India relations

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Contents

Natural gas

Its centrality in Qatar- India relations

Sukalp Sharma, Oct 27, 2023: The Indian Express

It is India’s largest source of liquefied natural gas (LNG) — gas that has been super cooled to liquid form so that it can be transported by sea — accounting for more than half of overall import volumes of the fuel. Indeed, LNG is at the heart of the trade relationship — it makes up almost 50% of overall Indian imports (by value) from Qatar.

Gas import dependency

India’s import dependency in natural gas is around 50%, and given the government’s concerted push to increase natural gas consumption, imports are only likely to rise in the coming years, even if domestic production of natural gas increases.

Government-owned Petronet LNG, India’s largest LNG importer, has a long-term contract with Qatar for the import of 8.5 million tonnes per annum (mtpa) of LNG. In addition, Qatari gas has a sizable share in India’s LNG purchases from the spot market.

India has set itself an ambitious target to increase the share of natural gas in the primary energy mix to 15% by 2030 from a little more than 6% at present. This is bound to result in a rapid increase in LNG imports over the next few years.

Natural gas is seen as a significantly cleaner alternative to conventional petroleum fuels like diesel and petrol, and is usually cheaper than crude oil. For India, which has an import dependency of over 85% in crude, gas is both more affordable and a better transition fuel in the energy transition pathway.

Given this situation with India’s energy security concerns and ambitions, the case of the retired Navy personnel presents a sensitive challenge for Indian diplomacy.

India, Qatar, and LNG

India’s total imports from Qatar in FY2022-23 were valued at $16.81 billion, of which LNG imports alone were worth $8.32 billion, or 49.5%, an analysis of official trade data shows.

India’s other major imports from Qatar are also fossil fuel-linked commodities and products, such as liquefied petroleum gas (LPG), plastics, and other petrochemicals.

On the other hand, India’s exports to Qatar were valued at just $1.97 billion in FY2022-23. The major exports include cereals, copper articles, iron and steel articles, vegetables, fruits, spices, and processed food products.

India imported a total 19.85 million tonnes of LNG in FY23, of which 10.74 million tonnes, or 54%, came from Qatar, the trade data show. This means that apart from the 8.5 million tonnes of LNG that Qatar supplied as part of the Petronet LNG term contract, nearly 2.25 million tonnes of additional gas was purchased from Qatar on spot basis last year.

While Indian LNG importers — predominantly the public sector oil and gas companies — continue to make efforts to diversify sourcing, it could be years before the high reliance on Qatar can be reduced to a meaningful extent.

The global LNG market

The global LNG market is a seller’s market after Russia’s invasion of Ukraine and the sanctions that have disrupted Russian natural gas supplies to Europe. After the war broke out, prices, particularly of LNG spot cargoes, surged globally.

Compared with term contracts (such as the one Petronet has with Qatar), the spot LNG market is prone to higher price volatility. In a supply glut, spot prices tend to fall more steeply than term contracts, as pricing in the latter is based on an agreed formula between the buyer and the seller. And when supplies are tight, spot prices tend to rise much more than term contract rates.

The war has put Qatar, the world’s largest exporter of LNG, in a unique position of strength. According to industry experts, the extreme price volatility of the past couple of years in global LNG markets has established that term contracts, and not spot purchases, are the more viable option to secure supplies at a reasonable and stable price.

This has pushed LNG importers all over the world, including India, to scout for long-term contracts with major suppliers, of whom Qatar is the foremost. Over the past few weeks, Doha has announced 27-year LNG supply deals with French, Dutch, and Italian energy majors. In the preceding months, it had signed long-term contracts to supply LNG to China and Germany.

Petronet’s term contract runs out in 2028, and negotiations for an extension are currently under way. India is also looking to sign more long-term LNG contracts.

Analysts and industry experts predict that the global LNG market is likely to turn into a buyer’s market over the next few years due to a surge in new LNG export projects coming onstream. This scenario, however, is still a few years away. And even then, a large chunk of this new LNG export capacity is expected to come onstream in Qatar itself.

YEAR-WISE DEVELOPMENTS

2023

Eight Indian ex – Navymen sentenced to death

Oct 27, 2023: The Times of India

Eight former Indian Navy personnel have been sentenced to death by a Qatari court on charges that have not been made public. The men, who were working with a firm involved in training Qatari defense forces, were accused of spying. The Indian government expressed shock at the verdict and said it would raise the issue with Qatari authorities. The case has been marked by secrecy, but media reports suggest the men were accused of passing sensitive information on a Qatari-Italian submarine project to Israel. India had previously raised the issue diplomatically with Qatar.NEW DELHI: A Qatari court on Thursday sentenced to death eight former Indian Navy personnel who were arrested last year on charges that have not yet been made public by local authorities, but are assumed to be - in the absence of any denial by either country - regarding spying.


The men were working with a firm called Al Dahra which was involved in training of the Qatari defence forces.


The chief of the company, an Omani national, was also arrested but released after a couple of months.The Indian government said it would raise the issue with Qatari authorities. "We are deeply shocked by the verdict of death penalty and are awaiting the detailed judgment. We are in touch with family members and the legal team and we are exploring all legal options," the external affairs ministry said in a statement.

The eight men were identified as Commander Purnendu Tiwari, Captain Saurabh Vasisht, Captain Birendra Kumar Verma, Captain Navtej Singh Gill, Commander Sugunakar Pakala, Commander Sanjeev Gupta, Commander Amit Nagpal and sailor Ragesh. Tiwari was given the Pravasi Bhartiya Samman, on recommendation from Doha, for his contribution towards capacity-building for the Qatar navy. Tiwari was the first armed forces personnel to be awarded this honour meant for NRIs.

Qatar: Capital punishment for 8 former Indian Navy officers, India seeks legal options

Qatari intelligence had dramatically detained the eight on August 8, 2022, without specifying the charges against them and kept them in solitary confinement for months before their trial was finally initiated in late March this year.

The case has been marked by complete secrecy from the beginning, although media reports have suggested that Qatar cited electronic intelligence to accuse the Indian men of passing on to Israel sensitive information on a Qatari-Italian collaboration on a stealth submarine project.

India had earlier raised the issue diplomatically at high levels with Qatar but without success.

The government has been constrained not to put too much pressure on the Gulf state in the matter as much because of the nature of allegations as due to recognition that each country follows its own judicial process.

MEA on capital punishment to ex- officers of Indian Navy: 'Deeply shocked, exploring all options'

Indian envoy to Qatar last met ex-navymen on Oct 1 The sensitive nature of ties with Qatar may possibly also be a restraint. India has been working to further expand the relationship with Qatar, with focus on defence and security cooperation. PM Narendra Modi had visited Qatar, an important source of LNG , in 2016 and it was followed by other highlevel bilateral visits. Qatar is also home to 8 lakh Indian nationals who form the largest expatriate community in the country.

According to some family members of the eight men, they were not informed about the detention and they got to know about it only when they approached the company after their calls and messages went unanswered. Indian officials, including the ambassa dor in Qatar, Dipak Mittal, has held several meetings with the Navy veterans. He last met them on October 1.

Talks with Qatari authorities resulted in the imprisoned Indians being shifted from solitary confinement and put together in a ward in jail. Multiple bail petitions filed on behalf of the retired Navy personnel were turned down. The trial started on March 29 and seven hearings were held before they were awarded the death penalty.

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