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India Expects to Expand LNG Import Capacity Significantly in 2022

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India is expected to expand its LNG import capacity by 40% in 2022 with the commissioning of much delayed new terminals.

India, the world’s fourth-largest LNG buyer, currently has six LNG import terminals with a combined nameplate capacity of 42.5 million tons per year. Another 17 million tons is expected to be added next year (detailed below, also see map).

However, this may not significantly boost imports of the supercooled fuel.

India's new LNG terminals are likely to only add pressure on the existing terminals, which are already marred by low capacity use due to lack of downstream takeaway capacity. Half of the six operational terminals are operating at around 20% of capacity. There is also the problem of sky-high prices for LNG cargoes.

Nevertheless, analysts expected India's ambitious gas goals to push consumption up fourfold to over 600 million standard cubic meters a day by 2030, or 167 million tons/yr, about twice as much as China's LNG imports will be this year.

LNG imports currently account for about half of India’s gas demand. As domestic production is unlikely to keep pace with demand, the share of LNG in meeting demand is likely to expand to 70% by 2030.

Jaigarh

H-Energy will start commercial operations at its 6 million ton/yr floating storage and regasification unit (FSRU) at Jaigarh in the western state of Maharashtra in March, Hiren Mehta, vice president at the Mumbai-based company told Energy Intelligence.

He said the 35 mile (56 kilometer) long tie-in pipeline, that will connect the terminal with the national gas grid at Dabhol, is ready. H-Energy also plans to supply LNG via cryogenic road tankers to transport the fuel to those end customers who are not connected to the gas pipeline. Its truck loading facility will be completed by end-2022.

Mehta declined to provide any details on where the company will be sourcing LNG. Earlier this month Reuters reported that H-Energy had tendered for eight LNG cargoes a year for delivery over four years starting April 2022.

H-Energy in April brought FSRU Hoegh Giant, which has a storage capacity of 170,000 cubic meters, to Jaigarh, but commissioning was delayed as lockdowns to control the spread of Covid-19 led to labor shortages. The delay in completion of downstream infrastructure also caused commissioning problems. Media reports say the FSRU had to be leased to Trafigura.

Jafrabad

Mumbai-based Swan Energy also expects to commission its 5 million ton/yr FSRU at Jafrabad in the western state of Gujarat in April, Director Padmanabhan Sugavanam told Energy Intelligence. The terminal missed its commissioning deadline this year as the project site was significantly damaged by Cyclone Tauktae, which crossed Jafrabad in May. The cyclone and Covid-19 delayed construction of a breakwater facility, which will now be ready by March, Sugavanam said.

India’s state-owned companies Indian Oil Corp., Bharat Petroleum Corp. and explorer Oil and Natural Gas Corp. have each leased 1 million tons/yr of capacity at the Jafrabad terminal. Sugavanam said Swan will not buy any LNG on its own.

The FSRU Vasant, intended for Jafrabad, is currently in Ghana as it was subchartered by the Tema LNG project.

Dhamra and Karaikal

Conglomerate Adani Group’s 5 million ton/yr Dhamra LNG import terminal on the east coast is also likely to be commissioned next year after it missed its commissioning deadline for the second half of 2021. State-owned gas pipeline utility Gail India has booked 1.5 million tons and Indian Oil has booked 3 million tons at Dhamra.

Also likely to be commissioned in 2022 is the 1 million ton/yr Karaikal LNG import terminal in southern India after it missed its fourth-quarter 2021 deadline to begin commercial operations.

India's LNG Terminals

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Topics:
Floating LNG, LNG Projects, Gas Demand, LNG Demand
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