LNG

Indian liquefied natural gas imports rebounded by more than 11 percent in June even at higher prices after last month’s decline as internal gas demand also increased along with domestic production.

LNG imports for the month of June amounted to 1.96 million tonnes, or 29 cargoes, compared with 1.76MT, or 26 cargoes, in June 2023, an increase of 11.3 percent, according to preliminary data from the Ministry of Petroleum and Natural Gas.

LNG imports for the month of May had also come to 1.96MT compared with 2.11MT in May 2023, a decrease of 7.2 percent.

The deliveries for the first three months of the fiscal year so far from April to June edged higher by 0.7 percent to 5.77MT versus 5.73MT in the prior-year period.

Data showed that LNG deliveries in June 2024 cost $1.1 billion which was 10 percent higher than the $1Bln paid in June 2023.

Deliveries of LNG to India’s growing number of regasification terminals come from Qatar, which provides over one-third of volumes, as well as West Africa, the US, Russia Asia-Pacific nations and the spot market.

India’s eighth LNG import terminal, the Chhara facility in the West Coast state of Gujarat, received its commissioning cargo in April 2024.

The Chhara terminal has 5 million tonnes per annum of capacity and has been developed by Hindustan Petroleum Corp.

Domestic gas

The Indian Ministry data showed that India’s domestic natural gas production for the month of June rose by 2.9 percent to 2.993 billion cubic metres versus the 2.910 Bcm reported in June last year.

In the three months of the current fiscal year so far, natural gas output increased by 5.7 percent to 9.056 Bcm, up from 8.564 Bcm in the same period of 2023.

Reliance Industries, the Indian group with significant energy interests, started up a third gas field in the Krishna Godavari Basin KG-D6 block on the East Coast a year ago in a joint venture with BP of the UK. 

India’s production of coal-bed methane (CBM), which in Australia is used to produce LNG, also increased in June to 59.63 Bcm, up from 58.60 Bcm in May 2024 and was at 173.10 Bcm for the first three months of the fiscal year.

The Ministry also gave average capacity utilization rates for seven LNG terminals and with data covering the period from April 2024 to May 2024.

The total capacity of existing terminals has now risen to 52.7 MTPA from the eight facilities. 

However, the Chhara LNG terminal will take several months to appear in the Ministry regasification data book.

Regasification

The largest Indian terminal at Dahej, located north of Mumbai and operated by Petronet LNG, has capacity of 17.5 MTPA and had the highest utilisation rate of 107.2 percent of nameplate capacity in the period, up from 101 percent in May.

At the Hazira facility, operated by Shell India, the utilisation rate increased to 38.3 percent from 28.6 percent in May for 5.2 MTPA of capacity.

The GAIL (India) terminal at Dabhol, south of Mumbai, reported 73.8 percent usage, up from 69.9 percent last month for its 5 MTPA.

The West Coast terminal at Mundra belonging to Gujarat State Petroleum Corp. had regas levels at  34.4 percent up from 33.8 percent in MTPA and its highest ever for 5 MTPA.

At the Kochi facility owned by Petronet in the southwest state of Kerala usage edged lower to 20.6 percent from 20.9 percent last month for 5 MTPA of regas capacity.

The Kamarajar (Ennore) terminal owned by Indian Oil on the East Coast, saw capacity rise to 25.8 percent from 25.6 last month for 5 MTPA.

At the second East Coast terminal, owned by the Adani group and TotalEnergies and located at Dhamra in the state of Odisha, the utilisation rate was 25 percent in the April-May period, down from 26.9 percent for its 5 MTPA.

The Ministry data also showed that the nation had a total of 23,560 kilometres of natural gas pipelines in operation and another 5,630km was currently under construction.

GAIL India had the longest network of 15,916km of pipelines and a distant second place was occupied by the Gujarat State pipelines group and its 2,722km of pipelines.

Consumption

India’s natural gas consumption for June was 5.594 Bcm, an increase of 7.1 percent from 5.224 Bcm in June 2023.

Consumption for the April-to-June period was 16.707 Bcm, up by 3.8 percent compared with the 16.101 Bcm logged in the same period of 2023.

The major Indian consumers of natural gas are the fertilizer industry with around 34 percent of consumption, city-gas 22 percent, power generation 15 percent, refineries 9 percent, petrochemicals 5 percent and others 15 percent.  

LNG importer India said plans were advancing for more exploration and production of domestic energy resources as the nation was preparing to launch a 10th bidding round for oil and gas blocks in August or September.

Indian liquefied natural gas imports increased by 15 percent for the first 10 months of the fiscal year so far and  by 26 percent in January as an additional terminal was available and as prices declined by 27 percent since last year while demand continued to grow.

GAIL (India) Ltd, the shareholder in Petronet LNG and the operator of the Dabhol import terminal in the West Coast state of Maharashtra, signed a long-term supply deal with global commodities firm Vitol.

Petronet LNG, the state-backed owner of the largest Indian import terminal at Dahej in the West Coast state of Gujarat and a smaller facility at Kochi terminal in the southwest state of Kerala and with plans for a third terminal, is set to sign new long-term supply agreements with Qatar.

Petronet currently has three agreements it is renegotiating with QatarEnergy to extend beyond 2028 for 20 years or more.

Shareholders in Petronet, which began operations in 2004, have one agreement with Qatar to supply 5 million tonnes per annum, a second from 2009 for 2.5 MTPA and a third from 2016 for 1 MTPA.

The third deal is with the actual shareholders in Petronet - rather than the Petronet entity. These shareholders comprise the biggest Indian energy players GAIL India, Indian Oil, Bharat Petroleum Corp. and Oil and Natural Gas Corp.

The new deals are expected to be consolidated into two agreements instead of three. They would be for Qatari volumes in one deal of 7.5 MTPA and a second for 1 MTPA of cargoes.

Close to deal

“We are pretty close to signing the deals,” said Indian Oil Secretary Pankaj Jain in a statement.

At present, Petronet buys the 8.5 MTPA from Qatar with pricing based on a slope of about 12.67 percent of Brent crude plus a fixed charge of about 50 cents per million British thermal units and is apparently seeking better or similar terms.

Petronet also confirmed at the end of December 2023 that it was going ahead with a third import facility and its first on the East Coast at the Port of Gopalpur in the state of Odisha.

The company has proposed having a floating LNG facility at Gopalpur before converting to an onshore terminal. 

The total capacity of existing terminals in India rose in 2023 to 47.7 MTPA with the addition of the Dhamra terminal in Odisha owned by French major TotalEnergies and the Indian Adani group.

The new Petronet facility at Gopalpur would be India’s eighth, though would be only be the third located on the East Coast and the second in Odisha.

“Petronet LNG Ltd (PLL) has executed binding transaction documents and sub-lease deed and a Port Service Agreement with Gopalpur Ports Limited on December 27, 2023 for setting up of floating storage regasification unit (FSRU) with capacity of 4 MTPA (Phase-1), with provision for converting to 5 MTPA land-based terminal at Gopalpur Port,” said the company in its end-of-December statement .

Out of the seven Indian terminals operating the largest is Petronet’s onshore terminal at Dahej, located north of Mumbai and with capacity of 17.5 MTPA.

Petronet’s Kochi facility in the southwest state of Kerala has capacity of 5 MTPA, though is under-utilised because of a shortage of pipeline connections to markets.

Earnings

Petronet reported consolidated net profits at the end of October 2023 of 818.10 crore Indian rupees ($98.24 million) for the second quarter of the fiscal year compared with 744.25 crore rupees ($89.37M) in the second quarter of 2022 and 789.85 crore rupees ($94.85M) in the previous 2023 quarter to the end of June.

The company’s consolidated revenues from operations were much lower this year than last because of higher prices that prevailed in 2022.

The fiscal second-quarter revenues dropped by over 22 percent to 12,532.57 crore rupees ($1.30 billion) from 16,079.97 crore rupees ($1.93Bln) reported in the same quarter of last year.

However, the fiscal second-quarter income was higher than the 11,656.38 crore rupees ($1.39Bln) logged in the April-June quarter of 2023.

Indian liquefied natural gas imports surged for a third straight month by over 18 percent, helped by lower prices and higher domestic natural gas demand and amid more competition from rising local output from offshore the Bay of Bengal.

Indian liquefied natural gas imports jumped by 10 percent as lower prices helped encourage buyers while domestic gas output also increased along with the nation’s gas demand.

The decline in Indian liquefied natural gas imports slowed to 1.8 percent from the previous month’s 24 percent fall as cargoes for West Asia were expensive when competing with Europe and South America and as Indian domestic gas demand remained flat.

Indian liquefied natural gas imports dropped by 24 percent in May at prices lower than a year ago to reverse April’s brief rebound as domestic gas production was also flat while the start of the monsoon season in June has coincided with higher cargo prices.

Petronet LNG, the owner of the largest Indian import terminal at Dahej north of Mumbai, reported a record 39 percent surge in fiscal-year revenues, though posted a decline in net profits as regasification volumes rose during the fiscal fourth quarter compared with the previous three months while falling on an annual basis.