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LNG World Shipping

LNG World Shipping

Passage to India

Wed 14 Sep 2016 by Karen Thomas

Passage to India

Few prospective LNG markets are more closely watched than India, the growth market on which the LNG shipping industry is pinning its most fervent hopes.

Last year, India imported less than 15 million tonnes (mt) of LNG. However, forecasts from the Oxford Institute of Energy Studies suggest that by 2030 the country will import at least 48mt – and perhaps as much as 57.4mt, under a high-growth scenario.

This week brings new developments in the country’s quest to increase adoption of LNG as marine fuel for barges deployed along India’s inland waterways and along its 7,517km coast. Kolkata Port Trust has made available for a 30-year lease a 10-acre site at Haldia Dock, some 20km up the Hooghly River, to be used for LNG storage.

The West Bengal project supports efforts by India’s Ministry of Shipping to switch inland barges and coastal shipping to LNG to support the country’s COP21 pollution targets. Similar initiatives are under way in Goa and Maharashtra, and along the River Ganges – where Petronet LNG is preparing a feasibility report on setting up LNG terminals at Haldia, Sahibganj, Patna and Ghazipur.

New Delhi is also offering subsidies for gas power generation, through the Power Supply Development Fund, seeking to raise gas-based power capacity to 24,500MW – 8 per cent of all installed power capacity.

And Narendra Modi’s government hopes to boost home-grown shipbuilding too, offering a 20 per cent subsidy to all LNG-fuelled barges built in India, according to Energy Infra Post.

However, a report published this week by Dutch bank ING explores the growing conflict of interest, given government plans to boost Indian coal production.

“At the end of 2015, the country had [21.9 mt] of regasification capacity and this could reach [99.3 mt] by 2020 if all planned projects come on line,” ING reports. “However, it is unlikely that all announced projects will come to fruition, particularly given that India is still a heavy user of coal and is pushing towards higher domestic coal production…

“A more appropriate estimate is circa [47.5 mt] of regasification capacity by 2022.”

Energy-hungry India faces some tough choices. Renewables must also play a part in the mix. Nevertheless, even the most bearish forecasts point to a growing appetite for LNG. Assuming similar regas utilisation rates, ING concludes, Indian LNG demand is on course to more than double to 31.4mt – and as early as 2022.

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