NEW DELHI: India’s import of liquefied natural gas (LNG) shrunk for the first time this year in July, ending a blistering growth trajectory since January, as consumption crawled and local gas production expanded.
The country imported 1960 million metric standard cubic meters (mmscm) of LNG in July, 4 per cent less than the 2037 mmscm of gas it imported in July 2015, according to the Petroleum Planning and Analysis Cell (PPAC), an oil ministry’s arm. This is a sharp fall from 62 per cent growth in February, and above 40 per cent growth each in March, April, and May. The average LNG import growth between January and July was about 30 per cent.
The 4 per cent rise in local natural gas output from 2511 mmscm to 2621 mmscm partly covered the drop in gas imports, while nearly stagnant natural gas consumption at 4.58 billion cubic meters in July diminished needs for additional gas procurement. Between April and July this year, the local gas consumption has expanded 6.5 per cent while LNG import has risen 22 per cent.
India has been hoping to use more gas, one of the cleanest conventional fuels, in its factories, vehicles, and homes as international pressure mounts to lower carbon footprint and as a global collapse in prices makes it more affordable. The spot LNG prices are hovering between $5 and $6 per unit after having fallen about three-fourths since the beginning of 2014. A glut in the market is expected to keep prices lower until 2020.
India’s state-run Petronet LNGBSE -3.14 % reworked a long-term LNG import deal with Qatar late last year, which allowed prices to imitate spot more closely, helping local consumers buy more of Qatar’s gas at cheaper rates.
