India's demand for LNG is set to increase across industries, if prices are cooperative
Executives from the country's largest importers have said that India's appetite is likely to increase in the next few years, due to the demand for liquefied gas across fertiliser, city-gas, refining, and power sectors.
They added that a lower price would be necessary to increase consumption.
India is currently the fourth largest buyer of LNG in the world. It aims to increase the gas share to 15% of its energy mix by 2030, up from the current 6.2%.
The market is seen as one of the key drivers for global demand but remains price-sensitive.
GAS DEMAND IS EXPECTED RISE
Petronet LNG, the world's largest gas importer, forecasts that imports will rise to 28-29 million metric tonnes in 2026 from 25.5 million tons this year.
Akshay Singh, the Managing Director of India Energy Week, told reporters that this year's gas demand will be higher because last summer was relatively cool.
He added that the consumption will increase as more cities, households, and fertiliser and energy sectors use gas.
The Indian refiner Bharat Petrol Corp., which issued a 10-year LNG import tender recently, has said that it will consider issuing another long-term tender in the next year, due to its increasing gas sales, including those to transport, industry, and household.
Rahul Tandon is the head of its gas business. He said that BPCL sells 2.2 to 2.4 million tons each year and this figure could triple by 2030, reaching 6.5 to 6.6 million tons.
Price Sensitivity
India's drive to increase its gas consumption depends however on the price. Asian spot LNG prices rose this month to the highest level in nine weeks at $11.35 per a million British thermal units, as winter temperatures fell across northern hemisphere and heating demand increased.
The GAIL head expects India to sign additional long-term contracts for LNG imports if the prices drop.
Sandeep Kumar Gupta, Chairman and Managing director of Sandeep Kumar Gupta, said: "We are confident that oil-linked contracts for gas will be more affordable than at the current levels."
Petronet LNG's Singh stated that $6-7 per mmBtu?will be an affordable price range for India to increase its LNG consumption.
Henry Hub, the U.S. benchmark gas price for Louisiana, is volatile, and India needs more LNG contracts that are oil-linked.
The price of U.S. Natural Gas?futures rose by 124% in the last six days in volatile trading on Tuesday, amid fears that the extreme cold forecast for the Northeast this week could freeze some gas wells until the weekend. (Reporting and editing by Emily Chow, Additional reporting by Nidhi Dhumal, Sethuraman N and Mohi Nrayan, and additional reporting by Anjana Anil, Tanay, and Tanay; writing by Emily Chow, and Editing by Jan Harvey.)
(source: Reuters)
