Petronet LNG has confirmed that it is contesting arbitration proceedings initiated by the owners of three dedicated liquefied natural gas carriers, with claims escalating from ₹89.30 crore at the end of March 2026 to ₹625.42 crore by September 30, 2026, plus applicable taxes . The dispute centers on the vessels Disha, Raahi, and Aseem, which operate under long-term charter agreements with India LNG Transport Company (No.1), (No.2), and (No.3) Ltd respectively, entities in which Shipping Corporation of India participates alongside international partners .
The operational suspension dates to March 2, 2026, when Petronet issued a force majeure notice to QatarEnergy LNG following armed conflict and hostilities that began on February 28, affecting navigation through the Strait of Hormuz and regional LNG loading operations . All three vessels have remained largely idle since that date, with the exception of one vessel deployed for approximately seven days in June . QatarEnergy also invoked force majeure on March 4, and Petronet reported that scheduled cargoes could not be loaded from March 3 onwards .
The financial exposure disclosed by Petronet has grown substantially over the intervening months. The claims stood at ₹89.30 crore as of March 31, 2026, reflecting roughly one month of idle vessel hire and associated costs. By September 30, the figure had risen to ₹625.42 crore, representing approximately seven months of accumulated claims . Petronet has stated that no provision has been recognized in its financial statements for these claims, and that the ultimate outcome of the arbitration and any resulting financial impact cannot presently be determined .
Petronet's position is that the vessel owners' claims are not sustainable under the relevant time charter agreements. The company had stated in its March-year-end disclosure, based on legal advice, that it considered the claims untenable under the charter provisions . The September disclosure maintains that position, with the company's auditors drawing attention to the claims and the uncertainty surrounding their financial consequences in their review of the quarterly results . The arbitration will resolve competing contractual interpretations, including questions of risk allocation for disruptions arising from geopolitical conflict in a key maritime chokepoint.
The three vessels involved are integral to Petronet's longstanding arrangement to import 7.5 million tonnes of LNG annually from Qatar on a free-on-board basis, with Petronet arranging shipping and holding corresponding long-term gas sale agreements with Indian customers . Disha and Raahi each have cargo capacity of approximately 138,000 cubic metres, while Aseem can carry approximately 155,000 cubic metres . Petronet secured these vessels through long-term charters to improve transport reliability and limit exposure to freight-rate fluctuations, an arrangement that has now become a source of financial exposure amid the prolonged Hormuz disruption.
The arbitration unfolds against a backdrop of Petronet's otherwise strong quarterly performance. For the July-September quarter, the company reported a 53% rise in profit to ₹1,235 crore, even as revenue from operations fell 35% to ₹7,200 crore . The divergence between profit growth and revenue decline reflects the company's regasification business dynamics and possibly margin effects from the supply disruption, while the shipping dispute remains an unresolved contingent liability that could materially affect future results depending on the arbitration outcome .
For the broader Indian energy and shipping sectors, the Petronet arbitration highlights a structural vulnerability in long-term charter arrangements when geopolitical disruptions render vessels unable to perform their intended routes. The Strait of Hormuz crisis, which has driven shipping costs above 30% of barrel value according to ADNOC's CEO, has created a scenario where contractual force majeure provisions and risk allocation clauses are being tested in arbitration. The outcome of this case may inform how Indian charterers and shipowners structure future agreements for strategic energy imports, particularly regarding the allocation of risk for chokepoint closures and prolonged operational suspensions beyond the control of either party.