HomeBusinessReport: India to import record high volumes of LNG, as prices hit an all-time low on coronavirus out...

Report: India to import record high volumes of LNG, as prices hit an all-time low on coronavirus outbreak

Reader's Pick

India is set to import record volumes of liquefied natural gas (LNG) this month, data shows, taking advantage of the super-chilled fuel’s price hitting all-time lows due to the coronavirus outbreak dampening demand in China.

The South Asian nation is estimated to import about 2.36 million tonnes in February, shiptracking data from Refinitiv Eikon showed. That would exceed India’s LNG imports in October of about 2.3 million tonnes, the previous highest monthly total.

The country’s annual LNG imports is expected to rise by 10%-15% this year, said Poorna Rajendran of consultancy firm FGE.

“The low spot prices are creating some downstream demand especially from the city-gas sector,” a source familiar with LNG imports into India told Reuters. India regasifies LNG and uses it primarily in the city-gas distribution, fertilizer, power and industrial sectors.

- Advertisement -

Asian spot LNG prices fell to a record low this month after China’s top LNG buyer declared force majeure on some LNG deliveries following the coronavirus outbreak.

That prompted some of the cargoes bound for China to be diverted to India and also some Indian buyers to issue tenders seeking spot cargoes, traders said. Some of them are even seeking cargoes for several months, they added.

For instance, Reliance Industries issued a tender seeking five cargoes for April to June delivery while Gujarat State Petroleum Corp (GSPC) sought nine cargoes for February to April, traders said. GSPC likely did not award the tender, however, and may have re-issued it, the traders said.

The potential uptick in demand also likely prompted Emirates National Oil Company (ENOC) to issue a tender seeking eight cargoes for delivery into India over April to November, the traders said.

- Advertisement -

Infrastructure constraints, however, will limit LNG purchases by buyers in India, FGE’s Rajendran said.

“While weakness in Asian spot LNG prices will increase India’s appetite for prompt LNG imports, infrastructure constraints will limit LNG demand growth,” he said.

“This remained a key bottleneck in 2019 when low spot prices struggled to boost India’s LNG demand significantly. The start-up of Mundra LNG terminal and H-Energy’s Jaigarh terminal and the completion of GAIL’s Kochi-Mangaluru pipeline will determine Indian LNG demand growth in 2020.”

India wants to raise the share of gas in its energy mix as it battles high levels of pollution in many big cities and is working to expand its pipeline network and build new terminals.

Subscribe to our Newsletters

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Read latest Business News and Startup news on TechGraph. Watch live and latest news on TechGraph TV. Follow us on Facebook or follow us on Twitter and Instagram. Listen audio news from TechGraph Briefings on Spotify, Google Podcast, Amazon Music & on Apple Podcast.
 

Krishna Mali
Krishna Mali
Founder & Editor of TechGraph.

Latest News

Promoted Links

Related Stories

Paytm Payouts transfers Rs 1,500 crores

India-based e-wallet company, PayTM said, "Its Paytm Payouts has transferred ov...

Japan approves 26 trillion yen as economic stimulus package to combat overseas risks

Japan's cabinet approved an economic stimulus package worth 26 trillion yen ($2...

Sino-US trade war offers Europe’s chance to bank more Chinese reserves: Analysis

Should European countries want the euro to replace the dollar as the world's do...

Samsung Electronics asks its shareholders to use electronic voting for upcoming AGM

Technology giant Samsung Electronics has adopted electronic voting for the firs...

Rahul Gandhi hits on RCEP says, ‘Make in India’ has become ‘Buy from China’

Asserting that "Make in India" has become "Buy from China," Congress leader Rah...

Employees union seeks FIR against Jet Airways boss Naresh Goyal, Vinay Dube and on SBI Chairman

The employee union of Jet Airways, which is facing its worst crisis, Friday sou...

Rajesh Bysani joins Brainly as its new CPO

A New York headquarter peer-to-peer learning platform, Brainly has announced th...

Trustt Launches First Major GPT Product Suite for Banking Industry

Trustt - a leading SaaS cloud-based banking solution provider, today announ...

KlarifyLife, an HDFC Life Initiative, Launches ‘Term Guide’

KlarifyLife, an initiative by HDFC Life, has launched 'Term Guide', a custo...

Interview: Gaurav Jalan of mPokket says, “We do not restrict our service to a limited number of cities or colleges”

While speaking with TechGraph, Gaurav Jalan, Founder & CEO of mPokket said,...