LNG

Two Indian state-backed oil and gas companies have signed an accord to develop the Hatta natural gas field in the Vindhyan basin of Madhya Pradesh in Central India, including building an LNG liquefaction plant to supply the off-grid and transportation fuel markets.

The two companies involved are Oil and Natural Gas Corp. (ONGC), a company owned by India’s Ministry of Petroleum and Natural Gas as is its partner in the venture, Indian Oil Corp. Ltd (IOCL) whose activities are focused on refining petroleum products and producing petrochemicals, though both are already involved in the LNG sector.

ONGC and IOCL have signed a memorandum of understanding to establish a medium-sized LNG plant as part of the Hatta gas field development plan.

“The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status,”  explained ONGC.

“The plant will utilize cutting-edge technology to produce LNG, a cleaner alternative to traditional fossil fuels, significantly reducing carbon emissions and aligning with India's climate change mitigation goals,” ONGC added.

LNG sector

ONGC has subsidiaries already involved in LNG including Hindustan Petroleum Corp., the owner of India’s newest LNG import facility, the Chhara terminal located in the state of Gujarat and with 5 million tonnes per annum of capacity.

Another unit, ONGC Videsh, is one of three Indian companies who share a 20 percent stake in the TotalEnergies-operated Mozambique LNG project Area 1 licence in the Rovuma Basin of the southeast African nation.  

IOCL is also involved in LNG through its ownership of the LNG import terminal at Kamarajar Port in the East Coast state of Tamil Naidu with 5 MTPA of regasification capacity.

Both ONGC and IOCL are additionally associated and founding companies of Indian’s largest LNG importer, Petronet LNG which has West Coast import terminals at Dahej and Kochi.

ONGC said that the gas discovery at Hatta “represented the culmination of five decades of sustained exploration” efforts.

“ONGC has already submitted its Field Development Plan (FDP) to the Directorate General of Hydrocarbons to monetize its assets in the Hatta area,” stated the company.

The establishment of the Hatta gas field and the LNG plant will enhance the Vindhyan Basin’s status, upgrading it from a Category II to a Category I Basin.

India's sedimentary basins, covering a total area of 3.4 million square kilometres, are divided into three categories.

Category I is for basins with hydrocarbon reserves that are already producing; Category II is for resources with commercial production pending; and Category III are prospective areas where resources may be discovered.

Earnings

The submission of the Hatta gas development plan follows ONGC’s record fiscal-year net profits reported in May 2024 and amounting to 40,526 crore Indian rupees (US$4.85 billion).

However, gross annual revenues fell by over 6 percent to 643,037 crore rupees ($76.94Bln) as prices tumbled.

ONGC’s annual realised natural gas price dropped by 10.8 percent for the year to US$6.55 per million British thermal units from US$7.34 per MMBtu in the previous fiscal year.

The average crude oil price declined by 18.4 percent to US$75.91 a barrel from $93.02 per barrel in the 2022-2023 fiscal year.

L&T Hydrocarbon Engineering (LTHE) of India, a wholly owned subsidiary of global construction group Larsen & Toubro, has won a contract from the largest Indian LNG importer Petronet to further expand the nation’s biggest regasification facility at Dahej.

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 Prime Minister Narendra Modi will formally open the long-awaited 450-kilometres natural gas pipeline from the Kochi LNG import terminal in the southwest state of Kerala to the port city of Mangaluru in the state of Karnataka further north.

Indian liquefied natural gas imports increased by almost 12 percent last month and were on track for record fiscal-year and calendar-year totals as shipments increased due to rising demand, backed by higher terminal capacity use and a steady infrastructure build-out.

Petronet LNG, the largest Indian importer and owner of two regasification terminals on the West Coast, has named Indian Oil Corp. director of pipelines Akshay Kumar Singh as its new Chief Executive as the nation expands its LNG and natural gas pipeline infrastructure.

Indian liquefied natural gas monthly imports increased again in August as shipments to Asia gathered pace along with economic activity with September cargoes also pointing at India from Australia and Angola.

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 latest completed LNG import in the West Coast of India, the Mundra LNG terminal in the state of Gujarat, is expected to receive its first cargo in the weeks ahead after being mechanically completed about a year ago and now issuing a tender.