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Report: India’s LNG import growth depends on pipelines
PIPELINES & TRANSPORT
THE US Energy Information Administration (EIA) warned last week that the future growth of India’s LNG imports depended on the timely completion of new gas pipeline networks. This comes as construction of new pipeline capacity to move gas from coastal LNG imports to major inland centres of demand has experienced delays.
The EIA said India’s LNG import capacity had more than doubled over the past 10 years, and expects it to increase by a further third over the next three years as regasification facilities that are currently under construction enter service. Indeed, India has been the world’s fourth-largest importer of LNG since 2011, the agency noted, ramping up imports as domestic production has fallen but consumption has con- tinued rising.
India’s LNG imports accounted for over 50% of the country’s natural gas supply in 2019, up from 31% in 2012. Data for April – when the country’s strict lockdown was imposed – has yet to emerge but it appears that LNG imports continued to grow into March. For that month, they were up 20% year on year, reflecting Indian
buyers trying to take advantage of low LNG spot prices.
In March, India imported 2.9bn cubic metres of LNG, up from 2.4 bcm in the same month of 2019. Government data showed that the regas- ified imports supplied 62% of the gas demand from India’s fertiliser industry, about 52% of city gas, 21% of power generation, 87% of refin- ery demand, 92% of petrochemical and 56% of demand grouped under “other”.
Imports over the 2019-20 fiscal year were up 17.2% y/y, reaching 33.7 bcm, the data showed. However, the lockdown measures related to the coronavirus (COVID-19) pandemic are expected to put a dent in Indian LNG demand from April onwards, and previous forecasts for 2020 import levels are now being revised downward.
Qatar remains India’s leading LNG supplier, owing in large part to the short distance between the two countries. However, it is also increasingly importing more from the US, and new supply deals between US and Indian companies could be agreed, though buyers are currently hesitant to lock themselves into new contracts.
AUSTRALASIA
Australian LNG exports holding up in April
PERFORMANCE
AUSTRALIA’S LNG exports remained robust in April, despite many countries going into lock- down as they sought to contain the coronavirus (COVID-19) pandemic, thus putting the brakes on demand.
According to Australian consultancy Ener- gyQuest, the country’s producers actually exported more LNG in April than they did both in March and a year ago, in April 2019. The con- sultancy said this week that Australia’s LNG shipments totalled 6.9mn tonnes, or 101 car- goes, in April, up from 6.8mn tonnes in March – which also came to 101 cargoes. This was also a 3% increase year on year.
EnergyQuest noted that 40 of the April car- goes went to China, up from 29 in March and 36 a year ago. The figure is likely to be welcomed as a sign of recovery in Chinese demand as the country cautiously reopens after lockdown.
However, cargoes being shipped to Japan fell by 10 from 46 in March to 36 in April. This nonetheless marked a y/y increase from 33 in April 2019.
At the same time as deliveries to China have risen, however, warnings have come that deteriorating trade relations between Beijing and Canberra could have a negative impact on LNG trade between the two. Nonetheless, Ener- gyQuest’s CEO, Graeme Bethune, said there was little scope for China to cut its imports of Aus- tralian LNG even if trade hostilities did escalate. This was attributed to the fact that most deliv- eries to China from Australia are made under long-term contracts, with little flexibility for cancellations.
“You could imagine a situation where a small amount of cargoes could be delayed, or can’t land, to make a point, but it’s hard to see any material impact,” Bethune said. He believes that it is not in China’s interest to impose tariffs on Australian LNG, as this would hurt the country’s own buyers.
EnergyQuest estimates that on an annualised basis, Australia’s shipments have reached 84.2mn tonnes per year, up from its previous record of 77mn tpy in 2019.
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