LNG faces headwinds in India: Bleak outlook

LNG imports are likely to face headwinds going ahead
A surge in domestic gas production is just one of the factors
Around 18 mmscmd of LNG is likely to be displaced as RIL’s petcoke gasification unit comes on stream, coupled with ethane imports by RIL
The discontinuance of power pooling, a major demand driver earlier, is another factor.
A clutch of fertilizer plants is likely to come on stream by 2020 but that may not be able to keep LNG demand up in the face of rising domestic production.
Liquid fuels, spurred by low crude prices, can continue to replace domestic demand in dual feed industrial furnaces around the country.
Cumulative domestic production increase will be around 60 mmscmd over 2022.

The data is grim:

The website carries here the following data
Gas consumption date: Stable but trending downwards
LNG imports have been trending downwards
Domestic production is rising
Percentage of domestic gas in consumption is increasing
There is healthy CGD growth but that is offset by lower industry offtake
LNG prices have been trending up
ONGC and RIL gas production projections until 2023

 New terminals coming up at the wrong time?

The outlook does seem to be very bright just now for LNG terminals in India
What about Petronet LNG?
The differential between spot LNG prices and oil indexed Qatar based LNG is going to bite, leading to lower offtake of contracted LNG.Then again, with new terminals coming up, an increase in regasification tariffs will become difficult.

The website also carries here the latest commissioning dates and cost of new LNG terminals coming up
The outlook for them, including Petronet Indian LNG projects, will have to be reassessed given slowing demand and an avalanche of local supply.

Pakistan and Bangladesh are the bright spots:  Even as the prospect for LNG demand in India does look very bright in the short to the medium term, the outlook for Pakistan and Bangladesh has been raised
Bangladesh is set to join the club of importers next year
And projections are that LNG projects in India imports by Bangladesh may stand at a massive 25 MMTPA by 2025.



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