Page 12 - GLNG Week 12 2023

GLNG ASIA GLNG

India considers building strategic

LNG reserve

INDIA INDIA is giving thought to creating a strategic looking to secure long-term delivery contracts
reserve for LNG following serious supply stor- that will ensure supplies at a more stable price.
Petronet is India’s ages and price fluctuations during the Covid Petronet is currently renegotiating a contract
largest importer of LNG pandemic and the war in Ukraine, according to with Qatar for 7.5mn tonnes per year that expires
and is already building the finance director at Petronet, Vinod Kumar in 2028. The company wants to add another 1mn
storage tanks at its Mishra. tpy to the contract, Bloomberg reported.
terminals and installing Mishra said the government of Narendra Under Prime Minister Modi’s energy pro-
a FLNG import facility Modi has proposed that India should have more gramme, natural gas usage is slated to make up a
at Odisha. storage space for LNG “so that when prices are large share of India’s energy mix, but high prices
lower we should store [LNG], and supply when have stymied action in that direction.
there is crisis.” Speaking to Bloomberg, Mishra According to India’s Ministry of Petroleum,
said: “We have seen the crisis and it was difficult imports of LNG increased in February for the
for the government also to ensure supply.” second month in a row to 2.25bn cubic metres
Petronet is India’s largest importer of LNG (1.66mn tonnes), up by 11% from February
and is already building storage tanks at its ter- 2022. January imports amounted to 2.26 bcm.
minals and installing a floating LNG (FLNG) Between April 2022 and February 2023, India
import facility at Odisha. A government pro- imported 24.76 bcm, or 18.4mn tonnes, accord-
gramme designed to create a national LNG stor- ing to the ministry report. During that period,
age system has yet to be unveiled. the cost of importing LNG amounted to $16.8bn,
Russia’s invasion of Ukraine caused a major about 40% higher over the previous period. Dur-
disruption in global energy markets, causing ing the price crisis, India’s LNG imports stead-
some countries like India to seriously reduce ily declined and terminals operated at reduced
LNG imports as spot prices in Asia surged as capacities.
high as $56-59 per mmBtu. Prices are currently India has six LNG import terminals with a
around $12/mmBtu, but according to Mishra, combined capacity of 42.7mn tpy.
spot prices need to fall to $6-7/mmBtu for pur- India is reported to be considering a price
chases to accelerate. reduction and capping prices at $6.50/mmBtu,
Mishra said Indian LNG importers are now with a floor price of $4/mmBtu. ™

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