LNG

Contract flexibility, strong demand and reliable project execution are bolstering credit profiles of US and Canadian LNG producers, Fitch Ratings said. Longer-term credit upside could fade as competition intensifies, build costs rise and demand visibility weakens, leaving producers reliant on tighter capital discipline and low-cost expansions, analysts warn.

Turkey’s state energy company Botas has renewed its pipeline gas contract with Russia’s Gazprom, keeping volumes unchanged at 21.8 bcm/y. Analysts say this removes much of the upside risk to Turkey’s LNG demand in 2026.

Though India has not yet mandated the dispatch of gas peaking power stations, analysts see upside risk to LNG-burn following a government tender to purchase 1.8 Gigawatt of gas-fuelled generation between April and October. Torrent Power was awarded 1.35 GW, with Kashipur Gama and Kondapalli Lanco taking the rest of the tendered capacity.

Energy Aspects understands the three power producers will receive a fuel price linked to the CME west India LNG prices.

“This power tender alone translates to LNG demand of 0.12 million tons per month over the second quarter of 2025, assuming a 50% load factor and 50% thermal efficiency,” analysts explained, stressing:

“This demand will be price insensitive, as LNG is effectively subsidised by the government.”

Early heatwaves have propelled up electricity demand in India to record levels. The average load factor in March reached 211.3 GW, the highest level ever recorded and a 12.4 GW rise year-on-year. The amount of cooling degree days was 9% above the 10-year norm, but analysts anticipate Indian CCDs will be a staggering 19% above the 10-year average over the next two weeks.

Should this prolonged heatwave materialise, India’s power load jump to new record highs averaging 227 GW over the second quarter, up by 8 GW compared to Q2-23.

Though the LNG tenders are bound to increase gas-burn, coal and solar generation will continue to meet most incremental power demand. In March, coal and solar generation increased by 8.2 GW y/y and 4.9 GW y/y, respectively, while gas generation dropped by 1.3 GW y/y due to peaking power demand.

Upholding a bullish view, analysts said: “We see some upside risks to our Indian LNG demand forecast if the government mandates gas fired plants to run to prevent load shedding and ensure an uninterrupted power supply.”

Turkey’s incumbent gas importer BOTAS has issued a tender for delivery of five LNG cargoes in the first quarter of 2025 that will support the supply and demand balance in the EU gas market this winter. Analysts caution, however, Egypt’s new FSRU poses upside risk to non-European demand.