Page 6 - AsianOil Week 20

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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 capac- ity to move gas from coastal LNG imports to major inland centres of demand has experi- enced delays.
The EIA said India’s LNG import capac- ity 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 continued 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 regasified imports supplied 62% of the gas demand from India’s fertiliser indus- try, about 52% of city gas, 21% of power generation, 87% of refinery 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.™
SOUTHEAST ASIA
Pertamina may receive government bailout
POLICY
THE Indonesian government is reviewing plans to inject IDR128.04 trillion ($8.69bn) into 12 of the country’s state-owned firms, including Pertamina.
The financial support comes as various state- backed companies struggle to overcome the economic fallout of the coronavirus (COVID- 19) pandemic, a finance ministry official told Reuters on May 16. Pertamina, for example, is set to receive the assistance after having seen fuel sales collapse in the wake of the government’s COVID-19 quarantine measures. Other benefi- ciaries include power utility Perusahaan Listrik Negara (PLN), airline Garuda Indonesia and steelmaker Krakatau Steel.
While the government debates the plans, the Energy Ministry has moved to support Pertam- ina by allowing it to sell unblended diesel to fuel importers. Pertamina will be able to sell the fuel
without blending it with palm-based derivatives first, Reuters quoted the ministry’s bioenergy direc- tor, Andriah Feby Misna, as saying on May 18.
Indonesia requires diesel to be mixed with fatty acid methyl ester (FAME) to at least a 70:30 ratio before the fuel is marketed to the public. Misna said the unblended diesel would be sold to licensed importers who have access to FAME and that Pertamina could sell up to 1.95mn kilo- litres of the fuel this year.
By allowing Pertamina to sell unblended diesel, Jakarta hopes the company will be able to run down its diesel stockpiles more quickly that have soared over the last couple of months. The Energy Ministry asked 17 companies in April to prioritise buying domestic diesel supplies over imports.
“The onset of COVID-19 in Indone- sia has resulted in a decline in economic
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