India's LNG imports are due to increase in 2025, by between 4% and 10%.
This is due to robust local consumption, resilient economic growth and policy development, but tempered by international fuel prices amid supportive global demand/supply fundamentals, industry sources and analysts said.
A gradual rise in offshore gas production, strengthening pipeline infrastructure and increased regasification capacity were said to be positive for natural gas consumption, as India targets a 15% LNG share in its overall primary energy mix by 2030, up from the current 6%-7%, S&P Global Commodity Insights reported.
India's 2023 LNG imports totalled around 22.6 mill tonnes, with 2024 imports forecast to grow to about 27 mill tonnes, overtaking the record of 26 million tonnes recorded in 2020, according to Commodity Insights data.
"The [global] LNG market in 2025 remains tight, which will leave prices volatile and subject to movements following supply or demand shocks," James Taverner, senior director at Commodity Insights, said.
"We forecast the Platts JKM price to average about $14.3 per MMBtu in 2025, up from $11.8 per MMBtu in 2024," he added.
The anticipated increase in 2025 spot LNG prices is mainly attributed to Europe seeking more LNG following the cessation of Russian pipeline flows via Ukraine and delays in new supplies that were expected to come online in 2024, according to Ayush Agarwal, Commodity Insights’ LNG analyst.
He predicted that, as a price-sensitive buyer, the country's imports will reach about 28 mill tonnes, due to tight international markets, supported spot prices and a rise in domestic natural gas production.
"When it comes to domestic gas production, we are expecting some additional volumes from ONGC in Q1 2025," said Indian Gas Exchange Managing Director and CEO, Rajesh Kumar Mediratta.
However, he said that LNG imports will remain strong to fill the demand-supply gap, forecasting a 10% year-over-year growth in 2025.
Among gas-using sectors, the fertiliser segment is likely to drive only a marginal increase in demand in 2025, while the city gas distribution segment is poised for a 10% year-on-year growth, Mediratta said. The CGD sector currently consumes about 40 mill standard cu m per day of gas, he added.
Pipeline network expansion in 2025, including the expected commissioning of the Urja Ganga gas pipeline project and the partial development of the Indradhanush gas grid project (in the northeastern region), will cater for a few refinery needs, large industries, CGDs and fertiliser plants not connected to the grid, stimulating additional gas demand, Mediratta said.
Meanwhile, India's LNG regasification capacity is anticipated to rise. A recent HSBC Global Research report forecast at least a 25% year-on-year increase in the country's capacity.
Currently, the share of natural gas in India's electricity generation mix is less than 2%, while over 70% of the electricity mix is coal-based.
Essar Exploration and Production CEO, Pankaj Kalra, said: "With indigenous coal priced at $3-$5 per MMBtu and imported coal around $4.5-$6 per MMBtu, LNG pricing needs to fall within the $6-$8 per MMBtu range for gas to become competitive for power generation." .
Large-scale battery storage can work synergistically with gas-based power generation, he added. (January 20, 2025, Source: https://lngjournal.com/index.php/latest-news-mainmenu-47/item/112788-india-to-increase-lng-imports-this-year)
INDIA - LNG - SUPPLIES - IMPORTS - EXPORTS