UPSC Prelims Practice Questions — ADNOC inks 10-year LNG buy/sell pact with Gujarat Energy

Q1. Consider the following assertion: The ADNOC–Gujarat Energy LNG agreement reduces the share of India's contracted LNG that must transit the Strait of Hormuz. Which of the statements given above support/supports the assertion?

  1. The LNG to be supplied under the agreement is produced outside the Gulf.
  2. The agreement is ADNOC's fifth LNG supply deal with an Indian company.
  3. The Strait of Hormuz is the only sea passage out of the Persian Gulf.
  • A. 1 only
  • B. 1 and 3 only
  • C. 2 only
  • D. 1, 2 and 3

Q2. Suppose shipping through the Strait of Hormuz were blocked. Which of the following would let a Gulf producer keep part of its crude exports moving by sea?

  • A. A pipeline carrying crude to an export terminal on the Gulf of Oman coast
  • B. Additional deep-water loading berths at ports on the Persian Gulf coast
  • C. Larger tankers to cut the number of voyages needed through the strait
  • D. A pipeline carrying crude to a new export terminal on Qeshm Island

Q3. Consider the following facts: About a quarter of the world's seaborne oil trade passes through the Strait of Hormuz, and there is no nearby alternative sea route. Saudi Arabia can reroute about one-fifth of its exports by pipeline to the Red Sea, and the UAE about half of its exports by pipeline to the Gulf of Oman. Which of the following inferences can be drawn from the above facts?

  1. A closure of the strait would cut a larger proportion of Saudi Arabia's seaborne exports than of the UAE's.
  2. Existing bypass pipelines would not fully offset a complete closure of the strait for either of the two exporters.
  3. Since the UAE can reroute half its exports, its LNG exports would also be unaffected by a closure of the strait.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 2 and 3

Q4. Deliveries under the ADNOC–Gujarat Energy LNG agreement begin in 2028. Which of the following physical capacities will most directly decide whether India can absorb these additional volumes?

  • A. Crude distillation capacity at coastal refineries to process the cargoes
  • B. LPG bottling capacity of the public sector oil marketing companies
  • C. Underground cavern capacity under the strategic petroleum reserve programme
  • D. Regasification terminal capacity and pipeline links reaching end consumers

Q5. With reference to India's Strategic Petroleum Reserves (SPR) programme, consider the following statements: Which of the statements given above is/are correct?

  1. The Phase I reserves are located on both the eastern and the western coasts of India.
  2. The Phase II facilities are to be built entirely with Government budgetary funding, with no private participation.
  3. Allowing overseas national oil companies to fill the reserve caverns reduces the budgetary support needed from the Government.
  • A. 2 and 3 only
  • B. 1 and 3 only
  • C. 1 only
  • D. 1, 2 and 3

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Letting a foreign national oil company store its crude in India's strategic caverns adds to the crude India can draw on in an emergency.
  2. The foreign company storing crude at the Mangaluru reserve is barred from selling any of that crude to Indian refiners in normal times.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q7. With reference to the India–UAE Comprehensive Economic Partnership Agreement (CEPA), which entered into force in 2022, consider the following statements: Which of the statements given above is/are correct?

  1. Besides trade in goods, the agreement covers trade in services, investment, digital trade and government procurement.
  2. The agreement obliges the UAE to supply India a fixed annual volume of LNG at a preferential price.
  3. Preferential tariffs under the agreement apply to any good shipped from the UAE, regardless of where it was produced.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1 and 2 only

Q8. India aims to raise the share of natural gas in its energy mix to 15% by 2030, from about 6.3%. With reference to this target, consider the following statements: Which of the statements given above is/are correct?

  1. The target would be met automatically if India's total energy demand grew faster than its gas consumption.
  2. The target could be missed even if India's absolute gas consumption rose every year until 2030.
  3. Achieving the target requires gas's share in the energy mix to more than double.
  • A. 1 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 2 and 3 only