India Wants Eleven More LNG Import Terminals

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India's government has announced that it plans to build 11 LNG import terminals over the next seven years as part of the nation's plans to have natural gas contribute 15 percent of its energy mix by 2020.

India already has four LNG import terminals (Petronet’s Dahej and Kochi LNG terminals, Shell’s Hazira plant and the Dabhol terminal operated by Ratnagiri Gas and Power) and imports around 20 million tons of LNG a year, about 6.5 percent of its energy needs.

A Reuters news report states that Narendra Taneja, spokesman for the ruling Bharatiya Janata Party, said the plans would increase India’s LNG import capacity to more than 70 million tons per year. India would eventually require even more than 15 terminals to meet its demand, Taneja said, speaking at an industry conference in Bali, Indonesia.

India plans to electrify millions of households that currently use wood for fuel. It also plans to reduce reliance on coal and use the LNG to provide power for electric vehicles. India anticipates that all new cars sold will be electric by 2030. Taneja said the nation is looking to provide LNG for bunkering, including setting up a facility at Kochi port.

An LNG terminal at Mundra, on the west coast, is expected to be operational in the next few months. The terminal, partly owned by the Adani group, will have capacity for five million-tons of LNG per year. Adani is also planning to build a similar-sized terminal at Dharma on the east coast.

Last month, the Philippines company Atlantic Gulf and Pacific said it planned to complete construction of an LNG import terminal at India's Karaikal Port. A final investment decision on the project is expected this year.

India Gas Solutions, an equal joint venture of BP and Reliance Industries, plans to begin selling imported LNG to Indian customers next year. By entering LNG supply business in India, India Gas will directly compete with state-run suppliers such as GAIL, Indian Oil and Petronet LNG.

Industry analyst Platts says that the LNG market in India is witnessing dramatic changes in demand patterns. “Short-term deals will increasingly become a part of import strategy. Large importers, such as GAIL and IOC, are already buying more LNG from the spot market. The emergence of new importers, not restricted by long-term contracts, and increased third-party access to import terminals are encouraging more competition in India's downstream markets. This means new risk for traditional importers, which would eventually force them to prioritize price competitiveness and risk management over long-term supply security.”


The Maritime Executive

 

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