With growing need for natural gas in the country, India’s LNG regasification capacity is expected to double by 2025.
Currently, Indian natural gas production stands at around 92 million standard cubic metres per day (mscmd), which is expected to increase by 52% according to a report by ICRA, a Mumbai-based research rating agency.
The report states that India plans to increase its regasification capacity to around 47 million tonne per annum (mpta) – or approximately 165 mscmd – by fiscal year 2019/20 and around 55 mpta by fiscal year 2024-25.
Currently, India has only 25 mtpa capacity of regasification plants in four locations in the country, with a gas consumption of 51 billion cubic metres (bcm). It imports 25% of its natural gas requirements and 80% of crude oil, with current import bills hovering around $150bn and expected to increase to $300bn by 2030, the report adds.
The report also said India’s domestic natural gas production will increase from existing or already-discovered fields to 130 mscmd by fiscal year 2020-21, on the back of the likely commencement of Gujarat State Petronet Limited (GSPC)’s Deen Dayal block and Oil and Natural Gas Corporation Limited’s Krishna Godavari (KG) basin blocks, along with marginal increases in Reliance Industries Limited (RIL)’s production.
“The actual off-take could critically depend upon the price competitiveness at a time of depressed oil prices,” the report cautioned.
The ICRA report noted that a revenue-sharing model by the government will allow more companies to enter the LNG segment, as it is a more transparent and market-oriented regime for hydrocarbon exploration and production.
The report also said that India is not buying enough LNG from Qatar’s RasGas Co. Ltd, which has 25 years of agreement, as the contract cost is very high at around $12.50 per million British thermal units (mBtu) compared with the spot market price of around $8 per mBtu.
According to the oil ministry, petroleum product consumption in India has also grown by 3.14% to around 163.17 million tonnes during 2014-15.