Our data last week showed that India’s latest LNG terminal at Chhara has received its maiden cargo aboard the Maran Gas Mystras. The LNG terminal is designed with an initial annual capacity of 5.0mmt.In view of renewed steep LNG demand growth, the Chhara LNG terminal is poised to significantly enhance the natural gas infrastructure in India.
Our data on Friday last week showed the LNG carrier Maran Gas Mystras arrived at India’s latest LNG import project – HPLNG’s Chhara LNG.
The vessel had previously loaded the terminal’s maiden 0.07mmt cargo at the Punta Europa plant in Equatorial Guinea on 26 March.
Greenfield development
Indian LNG developer HPCL LNG (HPLNG) built the greenfield LNG storage and regasification terminal in Chhara in the Gujarat district of Gir-Somnath.
The Chhara terminal is part of the larger greenfield Chhara Port development, overseen by Simar Port Private Limited, which will manage all essential services for the safe transit and berthing of LNG carriers.
The LNG terminal is designed with an initial annual capacity of 5.0mmt (mtpa), with the potential for expansion to 10.0mtpa, according to HPLNG.
The terminal is designed to be capable of receiving Q-Max size LNG carriers. LNG will be stored in two full containment storage tanks, which are the largest of their kind in India. Each tank has a capacity of 200,000 cubic meters.
Joint venture
HPLNG, previously known as HPCL Shapoorji Energy Private Limited, was initially established as a 50:50 joint venture between Hindustan Petroleum Corp. and SP Ports in 2013. In 2021, HPCL acquired SP Ports’ stake, making HPLNG a wholly owned subsidiary of HPCL.
Significant infrastructure
Given the anticipated rise in demand for natural gas in India, the Chhara LNG terminal is poised to significantly enhance the natural gas infrastructure in India, according to the developer.
Crucially, it is promoted to play an important role in realising the Indian government’s vision of increasing the share of natural gas in the country’s energy mix from 6pct to 15pct by 2030.
Market volatility
As we have reported in our latest Magazine edition, India, whilst being a major LNG importer in Southeast Asia, remains very price sensitive.
High volatility in global LNG markets has previously translated into the Indian market growing cautious of the fuel, as the domestic gas market remains price regulated and a transition to deregulated gas prices is only scheduled to take place gradually by 2027.
However, Indian LNG developers have continued to invest in national infrastructure whilst a wave of new supply capacity is cementing LNG’s role as a crucial component of the regional energy mix until at least 2050.
Demand growth
Following a protracted decline as European demand growth in particular underpinned high spot prices in 2022, Indian LNG demand has returned to swift growth, amounting to 2.23mmt in March 2024. This was up 19pct month-on-month and 17pct year-on-year.
