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Published:September 19, 2020 6:25 AM
India has been the world’s fourth-largest importer of liquefied natural gas (LNG) since 2011, progressively growing LNG imports as India’s domestic natural gas production weakened and domestic consumption augmented. Consequently, India’s LNG imports have grown over and above 50% in 2019 from 31% in 2012. In the last 10 years, India’s LNG import capacity more than doubled and as regasification facilities currently under construction come online. Conversely, the projected future development will depend more on the timely completion of projects of natural gas pipeline networks. Until now, the pipeline constructions to move LNG from the coastal import facilities to major demand centers have suffered unnecessary interruptions. LNG Market in India 2020 Total 33,867mmscmLNG Imported during 2019-20. Total LNG import for this year as of now in terms of quantity is 16102 mmscm. LNG Import from January to June 2020 decreased by 105 mmscm. In last 6 months, February witnessed highest import with total LNG import if 3453 mmscm whereas April witnessed the lowest 1947 mmscm LNG imports. LNG import for June, 2020 was 2673 MMSCM which was 6.9% lower than the corresponding month of the previous year. The cumulative import of 7003 MMSCM for the current year till June, 2020 was lower by 12.5% compared with the corresponding period of the previous year. Total LNG imports valued at 9.5 Billion during the 2019-20. Total LNG import for this year as of now in terms of value is 3.9 USD Billion.LNG Import from January to June 2020 decreased by 0.2 USD Billion. LNG imports estimated at 0.9 USD Billion during February which was the highest in the last 6 months whereas the lowest valued at 0.4 USD billion during April 2020. DEMAND & SUPPLY (JUNE 2020) Domestic gas production, available for sale, gradually decreased from 113 million metric standard cubic metres per day (mmscmd) in 2011-12 to 68 mmscmd in 2016-17, before making a minor recovery to 71 mmscmd in 2018-19. While the sharp fall in gas production from the Krishna-Godavari (KG)-D6 Field is well recognized, a fall in production from the ageing Fields of government-owned upstream companies also contributed to the weakening in domestic gas availability. Natural gas available for sale during June 2020 was 4452 MMSCM (decrease of 9.6% over the corresponding month of the previous year). Natural Gas producing companies use some quantity of gas for their own use as internal consumption while some quantity of gas is flared as a part of technical requirement. After flare, loss and internal consumption by gas producing companies, the net production for sale of gas to consuming sectors like power, fertilizer, CGD, refinery, petrochemicals etc. was approximately 76.55% of the gross production during June 2020. Total consumption during June 2020 was 5137 MMSCM. Major consumers were fertilizer (31%), power (21%), refinery (19%), City Gas Distribution (CGD) (10%) and petrochemicals (4%). POLICY UPDATE: LNG STATIONS The June 2, 2020 clarification by PNGRB is an eminent step in reinforcement the Government’s commitment towards reduction of fuel emissions by increasing the share of LNG in India’s energy mix and promote the usage of cleaner fuels in the future. Any entity can set up an LNG station in any geographical area (GA) or anywhere else, even if it is not the authorized entity for that GA. This implies that entities holding authorisation to develop City or Local Gas Distribution Networks are not the only ones entitled to distribute and market LNG, and the clarification therefore widens the scope of eligible parties to engage in this business. This helps resolve long standing regulatory confusion over LNG stations and would help many companies such as Shell or Petronet LNG, which do not own city gas licenses but are keen on marketing LNG for transport, launch their own dispensing stations. Current LNG terminals in India Dahej LNG Terminal meets almost 40% of India’s gas requirement and around 75-80% of LNG imports in the country. Kochi Terminal has so far handled 45+ Cargoes operations (including 18 Reload / Cool down Cargo operations and 2 bunkering). Hazira terminal in Gujarat handled 7 million tonne cargo during the June quarter, a rise of about 3 per cent from the year-ago period. LNG TERMINAL EXPANSION TILL 2022 in india LNG terminals, a regasification project with project cost of US$237 million and capacity of 195 BCF, Jaigarh Port Floating, is scheduled for commissioning in Q2 2020. The project is located in Maharashtra and as it is one of the highest affected state many activities in Maharashtra is banned and state is under lockdown and thus the commissioning of this port is likely to get delayed. In April 2020, the state of Odisha to order a temporary shutdown of Dhamra LNG Terminal which is scheduled for completion in mid-2021. Same is the case of Jafrabad, Karaikal and Chhara plants. Opportunities/Way Ahead With increasing natural gas demand, India remains one of largest consumer of gas. Indian government consistent efforts towards gas based economy fuelling the growth & demand of LNG in India. Growing emphasis on expansion of gas pipeline infrastructure, expanding demand for natural gas from power and industrial sectors in addition to supportive government policies is making LNG a commercially viable fuel for an increasing number of end users industries in India. Upcoming LNG terminal projects and cost-effectiveness of LNG as compared to other alternative fuels are among the major factors expected to positively impact the country’s LNG market scenario over the next coming years. LNG as automotive Fuel will help to diminish one of major concerns of GOI to reducing the carbon emissions from the petroleum fuels such as petrol, diesel etc. With the momentum from GOI to consumption of CNG and LNG as an alternative to diesel and petrol until automakers cultivate competent and reasonable electric vehicles, this clarification will permit the LNG terminal operators, such Petronet LNG Limited and Shell, who were looking for opportunities to sell LNG to retail customers, to open LNG stations. GAIL, the country’s largest gas marketer, is already in talks with ExxonMobil, Mitsui, and fleet owners to build a network of LNG stations along the country’s 6,000 K.M. long golden quadrilateral expressway. This clarification by PNGRB would open up opportunities for public sector undertakings and private retailers to enter the retail LNG market.
India has been the world’s fourth-largest importer of liquefied natural gas (LNG) since 2011, progressively growing LNG imports as India’s domestic natural gas production weakened and domestic consumption augmented. Consequently, India’s LNG imports have grown over and above 50% in 2019 from 31% in 2012.
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