The biggest gas importer on the subcontinent, Petronet, is looking to secure some 12 million tons of liquefied natural gas [LNG] annually in additional supply under long-term deals.
The development, which was confirmed to Bloomberg by the company’s managing director, Akshay Kumar Singh, aligns with plans by India to secure long-term deals for the supply of liquefied natural gas in a bid to reduce the share of coal in its energy mix.
The report, referencing tanker tracking data, said this additional amount is equal to almost two-thirds of India’s total LNG imports in 2022.
India’s government plans to increase the share of natural gas in its power generation mix from 6% currently to 15% by 2030 and long-term deals are clearly one safe way of doing that.
However, intensified competition for LNG cargoes has reduced the amount of available gas for long-term deals. As part of efforts to boost LNG supply, Petronet will seek to increase the contracted amount of LNG it buys from Qatar by 1 million tons annually, the managing director stated.
Russia’s Novatek is also in talks with Indian gas importers for LNG deliveries, the chief executive of the company Leonid Mikhelson said on Monday at the India Energy Week.
India is currently expanding its gas distribution network in cities, which would drive higher natural gas demand. To respond to that demand, along with plans to reduce coal dependency, India’s government has plans to expand the capacity of its LNG import terminals by 53% in the next few years.
The country’s capacity to date is 22.5 million tons annually and the Modi government wants to expand this by 12 million tons.
Meanwhile, India has slipped from number four in the global top LNG importer ranking to number seven amid sky-high LNG prices prompted by Europe’s eagerness to replace pipeline Russian gas with the super-chilled fuel.
By Ken Okafor