India’s pure fuel consumption is anticipated to extend this yr, pushed partly by a projected soar in LNG arrivals which might be seen as essential to the federal government’s purpose to greater than double the share of pure fuel within the nation’s energy technology combine by 2030.
“We expect Indian liquified pure fuel imports to climb within the second half of the yr,” stated Vitality Facets’ James Waddell, head of European fuel and world LNG. “Though imports held broadly flat year-over-year in mid-summer/monsoon season, we anticipate LNG imports to once more begin rising.”
India is the world’s fifth largest LNG purchaser, in line with the Worldwide Group of LNG Importers. However Waddell identified that it’s also a worth delicate market. “If there are strikes at Australian LNG export amenities,” he instructed NGI, “then the resultant enhance to world LNG spot costs may kill off a few of that Indian demand progress.”
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For now, the Worldwide Vitality Company expects India’s pure fuel consumption to rise 4% year-over-year in 2023, supported by stronger progress within the energy and industrial sectors and the nation’s efforts to increase metropolis fuel distribution networks to cut back dependence on coal.
Final yr, file excessive LNG spot costs pushed India’s consumers out of the spot market. The nation’s LNG imports dropped to twenty.2 million tons (Mt) from almost 24 Mt in 2021, in line with Kpler.
Excessive LNG costs impacted India’s terminal utilization charges earlier this yr, when simply 40% of regasification was used on common through the first quarter, in line with India’s Ministry of Petroleum and Pure Fuel. Demand has ticked up barely since then.
As European LNG demand has softened and Asian spot costs have dropped, India and different price-sensitive consumers have returned to the spot market to cowl elevated energy demand throughout sizzling climate. Kpler information reveals India’s year-to-date LNG imports are 14.06 Mt, or simply above the 14.01 Mt that it imported over the identical interval final yr.
“Kpler expects India’s LNG imports to vary between 1.8-2.0 Mt per 30 days from August via to October earlier than tailing off within the peak winter months when spot costs are anticipated to extend and price-sensitive nations, resembling India, draw back from the spot market,” stated Kpler analyst Laura Web page. “Throughout this time, we anticipate India to largely depend on its long-term contracted provide.”
Petronet CEO Akshay Kumar Singh stated earlier this yr that decrease LNG costs are a constructive signal for importers. He instructed information media that extra spot cargoes had been coming into the nation. With LNG costs of their present vary close to $12/MMBtu, Singh stated pure fuel can higher compete with different fuels.
Indian consumers are additionally trying to safe further long-term contracts to keep away from risky spot costs.
Petronet, Gail Ltd. and Indian Oil Corp. (IOC) have been assembly commonly with world LNG suppliers. IOC lately signed an settlement to purchase 2 Mt from Adnoc Fuel plc and one other 0.8 Mt from TotalEnergies SE starting in 2026.
“And we perceive that different Indian LNG importers have been in discussions for long-term provides, however no offers have been concluded since IOC’s in July,” Web page instructed NGI. “It has additionally been reported that some gamers are renegotiating current time period offers.”
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