India's LNG imports continue to drop in May

India's LNG imports continued to decline in May from April as Covid-19 lockdowns intensified last month.

The country received 2.59bn m³ of pipeline gas equivalent (2.06mn t of LNG) last month, down from 2.66bn m³ in April and 2.97bn m³ in March but up from 2.37bn m³ in May 2020. A national lockdown was imposed at the end of March 2020 to curb the spread of the virus, curbing LNG demand in May. LNG imports in pre-pandemic May 2019 totalled 2.52bn m³, according to oil ministry data.

India's gross gas production reached 2.74bn m³ last month, up by 19pc from 2.3bn m³ a year earlier. Gas production has risen this year because of new output from private-sector refiner Reliance Industries and BP's deepwater areas in the Krishna Godavari basin.

Total gas consumption fell to 5.25bn m³ in May, flat from April but up from 5.03bn m³ a year earlier and 5.18bn m³ in May 2019. LNG import dependency was at 49pc last month, down from 51pc in April. High spot LNG rates of $12/mn Btu has also hurt demand for the fuel in India, an official from state-controlled importer Petronet LNG said.

A resurgence of Covid-19 cases in the country has affected demand for city gas and LNG use by refineries and industries. But demand for gas and LNG should increase this month as lockdowns ease.

India is expected to rely more on LNG this decade , but it will need to substantially increase its import capacity to meet its target of gas taking a 15pc share of the energy mix, according to Petronet LNG. The country will have to boost its LNG import dependency to 70pc by 2030, despite increasing domestic production, if it is to meet its target of raising gas' share of the energy mix to 15pc from 6.3pc at present, chief executive AK Singh said. LNG use is set to increase sharply as the country plans to boost gas consumption to 650mn m³/d by 2030, from 155mn m³/d now.

By S Dinakar

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