Page 5 - AsianOil Week 04 2023

AsianOil COMMENTARY AsianOil

any sizable growth in domestic gas production International Holdings does not envisage the
in the years to come. start-up of any Indian terminals until at least the
More LNG will require more LNG infra- end of 2024.
structure. At the start of last year, the country It is easy to understand why the gas demand
had six LNG import terminals with a combined needed to drive these projects is underperform-
capacity of 42.5mn tonnes per year. They were ing, and why the government is now in less of a
working at only 20% of capacity, but increased rush to advance them. International LNG prices
LNG demand was expected to mean that more have fallen back to the level that they were before
terminals are needed. Russia’s invasion of Ukraine, but even back then,
However, upcoming projects have faced. prices were very high, at more than $25 per
Delays. The Jaigarh LNG terminal was meant to mmBtu.
come onstream last year, but commissioning was This has forced the government to signifi-
stalled because of COVID-19 disruptions and cantly expand subsidies to key industries such as
labour shortages. The development of down- power and fertiliser production.
stream infrastructure was also delayed. It seems clear that India will struggle to reach
The Jafrabad LNG project has also faced set- its goal to more than double the share of gas in
backs. That terminal was meant to be up and the energy mix by 2025. The less gas that is used,
running by the end of 2019, but its facilities faced the more coal, or preferably, renewables, are
cyclone damage several times, and pandemic-re- exploited.
lated issues resulted in further delays. The ter- India has made impressive progress in devel-
minal’s FSRU is set to be redeployed elsewhere, oping its renewables industry. It now boasts the
according to industry reports. fourth largest wind power capacity in the world,
Likewise, the onshore Dhamra LNG termi- and the third largest solar capacity. It is the third
nal was suspected to be online in the second half in terms of overall renewable power capacity
of 2021. But despite supply agreements being in additions.
place with GAIL and India Oil, the facility is still However, renewables still have a long way to
not ready to operate. Its operator TotalEnergies go.They still only account for around 5% of the
said in September 2022 that the terminal would energy mix. Renewables are also an intermit-
be launched at the end of last year, but there has tent source of energy supply. In the absence of
been no further update. extra gas-fired power, coal will have to serve this
Meanwhile, the Karakail LNG terminal purpose.
was scheduled for launch in the fourth quar- Until global LNG prices subside to pre-en-
ter of 2021, but it missed its completion dead- ergy crisis levels, India’s gas ambitions are
line. Now the operator, Atlantic Gulf & Pacific unlikely to get back on track. ™

Week 04 27•January•2023 www. NEWSBASE .com P5