Gujarat emerges as India’s ‘petro capital’: Officials
With the world’s largest grassroot oil refinery in Jamnagar and OPaL petrochemical complex at Dahej in Bharuch district, Gujarat is now recognised as the ‘petro capital’ of India, officials said. Reliance Industries Ltd’s (RIL) Jamnagar refinery is the largest and most complex single-site refinery in the world with 1.4 million barrels per day (MMBPD) crude processing capacity, they said. As per the official website of RIL, the Jamnagar refinery complex houses some of the world’s largest units, such as the fluidised catalytic cracker, coker, alkylation, paraxylene, polypropylene, refinery off-gas cracker and petcoke gasification plant… Gujarat Chief Minister Bhupendra Patel recently threw light on the impact of the state’s petrochemical sector. “Industrial development is an important means to realise the resolve of Prime Minister Narendra Modi.
Petronet LNG to set up LNG terminal on east coast of India
Indian LNG importer Petronet LNG Limited (PLL) has signed binding transaction documents with Gopalpur Ports to set up its maiden LNG terminal on the east coast of India. According to Petronet LNG’s social media update, sub-concession agreement, sub-lease deed, and port service agreement with Gopalpur Ports were signed on December 27, 2023. Under these agreements, the Indian company seeks to set up a floating storage and regasification unit (FSRU) based LNG terminal with a capacity of approximately 4 million metric tons per annum (mmtpa) in Phase 1, with provision for converting to 5 mmtpa land-based terminal at Gopalpur Port in Odisha. “Petronet LNG is in the process of setting up its maiden LNG terminal on the east coast of India at Gopalpur, District- Ganjam, Odisha which would bring augmentation in overall regasification capacity in the country thereby contributing towards a gas-based economy,” the company said. The Indian company has also established and operates Dahej and Kochi LNG terminals. Dahej LNG terminal currently has a capacity of 17.5 mmtpa and is under expansion to 22.5 mmtpa in two phases. The terminal has six LNG storage tanks and other vaporization facilities and meets around 40% of the total gas demand of the country. Kochi LNG terminal is Petronet’s second terminal with 5 mmtpa nameplate capacity. It was established to cater to the gas requirement of Southern India. Earlier this year, Adani Total Private Limited (ATPL), a 50:50 joint venture between Adani and TotalEnergies, commissioned Dhamra LNG terminal, which is India’s seventh LNG import and regasification terminal and the first on the eastern seaboard.
India’s LNG imports set for 7%-8% boost in 2024 on hopes of softer prices
India’s LNG imports in 2024 are expected to get a boost if prices stay pressured, with year-on-year inflows likely to grow up to 7%-8%, driven by higher demand in the power, industrial and transportation sectors while infrastructure spending also strengthens in a year due for national elections. “India’s LNG imports will continue to increase, with an expected 8% year-on-year growth in 2024,” Ayush Agarwal, an LNG analyst at S&P Global Commodity Insights, said. “While the fertilizer sector will remain the largest consumer of LNG, the power and industrial sectors could contribute to an increase in imports if spot prices average close to 2023 levels,” Agarwal said. The Platts JKM, the benchmark price reflecting spot LNG delivered to Northeast Asia, averaged $13.801/mt from Jan. 3 to Dec. 22 this year while the Platts West India Marker averaged $13.167/MMBtu during the same period in 2023, according to data from S&P Global. India currently has about 25 GW of gas-based power capacity installed. This translates to about 30 million-35 million mt/year of LNG demand, an LNG industry source based in Singapore said. A few gas-based power units ran on domestic gas because of high LNG prices in recent years. That should change in 2024 because of the LNG price weakness, he added. Over January-October, regasified LNG consumption by the power sector jumped 128% on the year, hitting 7.4 MMcm/d, while India’s peak demand grew 12.5% on the year during the same period to reach 243 GW, said Akshay Modi, a senior analyst covering South Asian natural gas, LNG and hydrogen at S&P Global. “With the Platts JKM expected to fall below $10/MMBtu in 2024 summers, peak demand touching new highs and gas supporting renewables intermittency, we expect higher regasified LNG consumption for power sector to continue in 2024,” Modi said. Demand spurts on low prices India’s LNG consumption was set to jump if prices dropped below the $10/MMBtu mark, industry sources said. The recent fall in prices has already sparked increased spot buying although some Indian buyers were exhibiting an appetite to consume LNG when JKM prices were relatively elevated, in the range of $15-$16/MMBtu. Among recent market activity, Gujarat State Petroleum Corp. has bought a January-delivery cargo at $11.10-$11.20/MMBtu for delivery to Mundra. In December, Indian Oil purchased a cargo at $11.20-$11.30/MMBtu for delivery to Ennore and GAIL bought a cargo at $11.40-$11.50/MMBtu for delivery to Dabhol in January. Sources are also expecting higher utilization at the LNG terminals. “Next year, we expect Dabhol terminal to be operational through the monsoon period as well … Dhamra will also be more utilized because of obligations to bring cargoes for GAIL, IOC,” one of the sources said. After the commissioning of HPCL’s Chhara and GAIL’s Ratnagiri breakwater facility, the regasification capacity will likely rise to 52.5 million mt/year, S&P Global’s Modi said, adding that IOC’s Ennore-Tuticorin pipeline is also targeted for commission in 2024. The country’s northeast gas grid commissioning plan has been granted an extension by the Petroleum & Natural Gas Regulatory Board until 2025. However, its progress will be crucial for the development of a gas-based economy in the region, Modi added. Meanwhile, from mid-December 2023, Administered Pricing Mechanism, or APM, gas supplies to the transport and residential sector have been reduced to about 75% of demand compared to 88% earlier, Modi said, noting that the APM supply cut might see more city-gas entities tying up mid- to long-term offtake contracts. The additional APM deficit for transport and domestic sector is around 3 MMcm/d and some of the volumes will likely be tied up by CGD’s in the expected upcoming ONGC auction in 2024, while the remaining will be catered through regasified LNG supplies, Modi added.