India targets global renewable ammonia market, aims for energy leadership
With the goal of achieving leadership in sustainable energy through smart international partnerships, India is staking its claim in the global market for renewable ammonia. India emphasises its commitment to renewable energy with plans to produce 5 million metric tonnes of renewable hydrogen by 2030 and gain a 10 per cent share of global trade. To help with project funding and implementation, leading organisations like ReNew-Jera and ACME-IHI have started to sign non-binding supply agreements for renewable ammonia, and more will follow. India’s affordable renewable hydrogen is well-positioned to compete internationally, despite challenges in the form of inconsistent policies and market competition from established ammonia manufacturers in South Korea and Japan. India’s competitive edge is further strengthened by the National Green Hydrogen Mission 2023, which eliminates interstate transmission fees and offers incentives. The industry is quite hopeful about India’s ability to achieve the demanding European standards for renewable fuels at more affordable rates than other global markets, as it has the capacity to produce hydrogen at a significantly lower cost than other countries.
CoolCo reveals more details on GAIL LNG carrier charter deal
LNG carrier operator CoolCo has revealed more details regarding its recent 14-year charter deal with India’s largest gas utility GAIL. CEO Richard Tyrrell said during the company’s first quarter results earnings call on May 22 that this charter deal with GAIL is the largest single contract CoolCo has ever entered into. He said GAIL is a “significant importer of LNG into one of the highest potential markets”. “It is great to establish our relationship and we’re aiming to work together on future projects,” Tyrrell said. GAIL is an end user for LNG and sells regasified LNG to customers in the fertilizer, city grid, power, refinery, and petrochem sectors, amongst others in India. The state-owned firm owns and operates a network of over 16,000 km of natural gas pipelines in India. It holds a stake in India’s largest LNG importer, Petronet LNG, and the company buys volumes under long-term LNG deals, including from the US and Qatar. GAIL charters LNG carriers to ship these volumes and currently has 4 vessels in its fleet. It also operates the 5 mtpa Dabhol LNG terminal in India. Tyrrell said growth in India is underpinned by a booming economy and high growth niches like the compressed natural gas and LNG markets for transportation. “You can see how LNG imports have bounced back now that the prices have stabilized after the Ukraine shock and are now back on their upward trajectory,” he said. “The high-teen return on equity that we achieved on the newbuild sets a supportive precedent for the second vessel, around which active discussions continue,” Tyrrell said. Kool Tiger and Kool Panther Under the long-term deal announced on May 16, CoolCo will charter one of the company’s two newbuild 174,000-cbm LNG carriers currently under construction at South Korea’s Hyundai Samho. CoolCo will deliver the newbuild to GAIL in the Gulf of Mexico, with the time charter starting in early 2025. Also, GAIL has the option to extend the charter by two additional years beyond the firm 14-year period. CoolCo purchased this and the other LNG carrier from its largest shareholder Eastern Pacific Shipping, and they feature GTT’s Mark III Flex membrane cargo tank system, reliquification, air-lubrication, and shaft generators. The shipping firm exercised its option with affiliates of EPS Ventures in June 2023 to acquire newbuild contracts for the two 2-stroke LNG carriers scheduled to deliver in the fourth quarter of 2024. CoolCo will pay about $235 million for each of the LNG carriers which will be named Kool Tiger and Kool Panther. This is much lower than the current prices in South Korea of about $260-270 million for a newbuild 174,000-cbm LNG carrier.
Petronet expects 15 percent rise in India’s LNG imports
India’s largest LNG importer Petronet LNG expects a 15 rise in the country’s imports of liquefied natural gas during this financial year, according to Petronet LNG’s management. Petronet’s executives said during the company’s earnings call on May 23 that the company expects India’s LNG imports to rise to 27 millions tons in the fiscal year 2025/2026 which ends in March next year. The reasons behind the growth are lower prices as India is a price-sensitive market and the hot weather during this season which has “substantially” increased power demand. India imported about 23.3 million tonnes during the April 2023-March 2024 financial year, up by 17.5 percent, according to PPAC data. At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes. These include Petronet LNG’s Dahej and Kochi terminals, Shell’s Hazira terminal, and the Dabhol LNG, Ennore LNG, Mundra LNG, and Dhamra LNG terminal. Hindustan Petroleum’s 5 mtpa Chhara LNG import terminal in Gujarat should also receive its commissioning cargo later this year. Dahej expansion and Kochi pipeline Petronet is currently expanding its 17.5 mtpa Dahej LNG terminal with about 5 mtpa of new capacity, and is also constructing two additional LNG tanks on top of the six existing tanks. The company’s executives said that the 5 mtpa additional capacity at the Dahej terminal should be available by March 2025. During the financial year which ended March 31, 2024, the Dahej terminal processed 865 TBTU of LNG as against 704 TBTU processed during the previous financial year. The overall LNG volume processed by the company in the financial year was 919 TBTU, and this compares to 752 TBTU in the financial year before. Besides the Dahej LNG terminal, Petronet operates the 5 mtpa Kochi LNG facility and is working on the Gopalpur FSRU project. The Kochi terminal is currently operating at about 20 percent capacity. Petronet expects the Kochi-Bangalore pipeline to be completed by the end of this year or by the end of March next year and this will substantially boost the utilization of the facility. Moreover, Petronet’s executives said during the call that the construction of the Gopalpur project will take about three years to complete and the project is currently in its initial stage. In December last year, the firm executed binding deals with Gopalpur Ports for its first LNG terminal on India’s east coast. Petronet and Gopalpur Ports signed sub-concession agreement, sub-lease deed, and port service agreement for the first phase of the 4 mpta FSRU-based terminal, with provision for converting to a 5 mtpa land-based terminal at the port. The company’s executives noted during the call that Petronet may opt for a land-based terminal because of limited availability of FSRUs in the international market.
India’s robust LNG imports are Asia’s standout, but higher prices may weigh: Russell
Asia’s imports of liquefied natural gas(LNG) are displaying contrasting dynamics in May, with strength in usually price-sensitive buyers like India, but a softer trend in the developed economies such as Japan and South Korea. The top-importing continent is on track to receive about 23.61 million metric tons of the super-chilled fuel this month, according to data compiled by commodity analysts Kpler. This is up slightly from April’s 23.23 million tons, although on a daily basis May’s arrivals are a touch weaker, while they are stronger than the 20.75 million from May 2023. But while the overall LNG import figures are relatively stable for Asia this month, the breakdown is somewhat at odds with recent movements in the spot price. India’s May imports are estimated at 2.46 million tons, up from 2.03 million in April and the strongest month since October 2020. The surge in arrivals comes even as the spot price for delivery to North Asia has been rallying, rising from a near three-year low of $8.30 per million British thermal units (mmBtu) in the week to Feb. 23 to a five-month high of $12.30 last week. What is worth noting is that the cargoes arriving in India in May would have been secured in a window from later February to early April, a time when spot prices were rising but were still below the $10 per mmBtu level. Now that the spot price has risen decisively above that level, it raises the possibility that Indian utilities will scale back purchases as LNG will no longer be competitive in the domestic market.