LNG

Indian liquefied natural gas imports plunged over 20 percent for a second successive month as the costs of LNG shipments soared, though falling volumes were again offset by offshore domestic natural gas pipeline supplies on the East Coast.

Two years after Indian Prime Minister Narendra Modi inaugurated the first Indian East Coast liquefied natural gas import terminal at Kamarajar Port, also known as Ennore, Qatargas has delivered its first and largest commercial cargo as the terminal seeks to boost its capacity utilisation, currently under 12 percent.

Indian liquefied natural gas imports dropped by almost 30 percent last month and the import bill was also half what it was in April 2019 as the Covid-19 pandemic resulted in a lockdown and affected trade activities.

LNG import for the month of April amounted 1.44. million tonnes, or around 20 cargoes, which was 29.4 percent lower than April 2019 when 2.04MT, or 29 cargoes, were delivered, according to provisional data from the Ministry of Petroleum and Natural Gas.

The LNG deliveries to India came mainly from Qatar, Australia, the US and West Africa.

The cost of the April 2020 cargoes amounted to around $400 million compared with $800M in April 2019.

The Ministry said that gross production of natural gas for April 2020 was 2.161 billion cubic metres, a drop of 18.6 percent compared the same month a year ago when output totaled 2.656 Bcm.

The total of LNG imports has been rising to more than 350 cargoes a year as more infrastructure is constructed, including pipelines to reach more industrial and city-gas customers.

The main operating terminals on India’s West Coast are at Dahej, Hazira and Dabhol, near Mumbai.

The newest terminal at Mundra, north of Mumbai, and is now operational and awaiting more shipments.

There is additionally the Kochi facility in the southwest state of Kerala and one East Coast terminal at Kamarajar, 25 kilometres north of Chennai Port in Tamil Nadu, and also known as Ennore.

Indian LNG imports in March 2020 had increased by more than 20 percent to 2.12MT from 1.76MT in the same month of the previous year.

For the April-to-March 2019-2020 fiscal year, shipments rose by more than 17 percent to 24.9MT from 21.3MT in the previous fiscal year.

With the opening of the Mundra terminal, India now has 42.5 million tonnes per annum of regasification capacity.

Of the LNG import terminals in full commercial use, capacity utilisation at Dahej was 103.1 percent through March 2020 and total capacity is 17.5 MTPA.

At Hazira it was 97.96 percent from 5 MTPA, while at Dabhol it was 32.9 percent from 5 MTPA.

The utilization at the Kochi facility was 16.6 percent in March from 5 MTPA and at Kamarajar (Ennore) it was 9.0 percent from 5 MTPA.

The newest Mundra terminal had 29.63 percent capacity utilization from 5 MTPA of capacity.

The Mundra facility is co-owned by Gujarat State Petroleum Corp. and the Adani Group and is designed with two storage tanks.

India's import costs for the previous full 2019-2020 fiscal year fell to $9.5 billion from $10.3Bln in the previous 12-month period.

A Singapore company has broken ground and started construction of infrastructure for what will be India’s eighth liquefied natural gas import terminal when it starts up in 2021 and only the second on the East Coast.

The Indian Hiranandani Group with plans to deploy a floating storage and regasification unit within months for LNG imports at Jaigarh port, south of Mumbai, has signed a cooperation accord with Russian company Novatek, operator of the Yamal LNG plant in Siberia and developer of the Arctic LNG II project.

Novatek said the memorandum of understanding envisaged cooperation in LNG supplies to India on a long-term basis, joint investment in future Indian LNG terminals planned by Hiranandani and in Russian LNG projects.

The family-controlled Hiranandani conglomerate and Novatek said they also planned to establish a joint venture to market LNG and natural gas to end-customers in India, Bangladesh and other markets.

The Indian company’s FSRU is expected to start commercial operations at Jaigarh port in the fourth quarter of 2019, a year behind schedule.

Chief Executive Darshan Hiranandani said recently the Indian project was on track and in addition to the FSRU includes related infrastructure and a pipeline of 60 kilometres.

“India is one of the largest and fastest growing LNG markets, and will be one of the main sources of future growth in global demand for natural gas,” said Novatek Chairman Leonid Mikhelson after the accord was signed with Hiranandani at an economic forum in the Russian Far East city of Vladivostok.

“It is an important step towards entering the end-customer market in India, which is of great interest to Novatek taking into account our strategic plans to implement new LNG projects and significantly increase our LNG production volumes,” added Mikhelson.

The Hiranandani Group's H-Energy subsidiary will operate the Jaigarh terminal with annual capacity of 4 million tonnes per annum of LNG and with re-loading capabilities.

Hiranandani is one of the largest Indian companies with its main offices in Mumbai and Dubai in the United Arab Emirates.

While it started as a property investment business it has broadened its interests into other areas such as energy and power.

H-Energy CEO Darshan Hiranandani said he was “excited” to partner with Novatek in Arctic LNG II and to participate in and bring supplies to downstream customers in India and Bangladesh.

“This will be through its terminals in Jaigarh, Kakinada and Haldia and through its two pipelines, Jaigarh to Mangalore and Kannai-Chatta to Shrirampur. This will  ensure a safe, reliable and economic supply chain from the gas fields to the burner tip,” explained Darshan Hiranandani.

The Indian FSRU charter to H-Energy is for a period of five years and the ship will arrive at the LNG jetty at Jaigarh just before the start-up.

Most of the onshore infrastructure work has almost been completed by Engineers India Ltd (EIL), a project construction company.

H-Energy said the West Coast facility would be of great benefit to Maharashtra state by providing clean fuel for transportation and for city-gas use.

“The LNG terminal will offer storage, regasification, re-loading, bunkering and truck-loading facilities to cater to the growing energy demand of Indian industries,” said the company.

When operational, the regasified LNG will be supplied to customers through the pipeline connected to national gas grids at the city of Dabhol.

The facility would be the fifth LNG import terminal located near Mumbai, with three of them located at Hazira, Dahej and Dabhol for use by importers Shell, Petronet LNG and Gas Authority of India respectively.

A fourth is mechanically completed at Mundra. It is owned by Gujarat State Petroleum and the Adani Group, though has yet to be fully commissioned.

However, there is only one LNG terminal for the whole East Coast of India with about half-a-dozen others planned.

Indian Prime Minister Narendra Modi inaugurated the first East Coast facility in March 2019 at Kamarajar Port in Tamil Nadu.

The Kamarajar facility is owned by Indian Oil Corp., the refining and fuel marketing company, and has 5 MTPA of import capacity and two tanks each with storage of 180,000 cubic metres.

Novatek also signed an LNG fuel transport agreement in Vladivostok with Petronet LNG, operator of the Dahej terminal north of Mumbai and the Kochi terminal in the southwest state of Kerala.

The Novatek-Petronet accord is on future LNG projects and the joint marketing of LNG as motor fuel in India, including joint investment in developing a network of filling stations and a fleet of LNG-fueled trucks.