LNG for India Outlook 2030 – A Mergen Advisory Exclusive Coverage Report (2020)

Overview of the Report

State of euphoria in Indian Natural Gas Market  

India has been registering a sustained growth in terms of demand for natural gas and its outlook towards sourcing LNG from global supply destinations has been promising. The positive sentiments around India as a promising LNG buyer received a significant push when India (at COP 21, Paris) committed to reduce its carbon intensity by a third from 0.37 kg per capita of GDP in 2005. All the same, the government’s plan to double the share of natural gas in India’s energy mix – from 6.5% in 2015 to 15% over the medium term goes well with the positive perception of India’s outlook towards developing its gas market.         

Indian government is rightly playing the role of a facilitator and has brought a series of new policies & frameworks in areas related to generating global interests in domestic Oil & Gas field development (DSF Bidding, Revenue Sharing Contract Model, HELP) and as well as bringing clarity on the pricing framework of natural gas in the country (New Domestic Pricing Guidelines, and Pricing Freedom for gas from deep-water, ultra-deep water and HPHT) through price notifications and price ceiling.

India’s energy outlook is transforming; Recognition of the versatility of natural gas in terms of meeting the growing energy needs of the country, considerations towards reducing massive imported crude oil dependence pegged at nearly 80%, support towards adoption of clean energy source and substantiating the domestic natural gas production volumes with imported LNG for sustainable natural gas market growth will help the government deal with its growing energy need.

Strong indicators pointing towards a robust LNG imports outlook

In a scenario where the traditional LNG demand anchors such as Japan, Korea and Taiwan are seemingly going slow or even cutting back on reviving/signing volumes, the LNG supplier interest has shifted towards India and China as the next major swing demand centres. India has been registering a steady growth in LNG imports for more than a decade. The share of LNG in India’s gas basket is close to 50%. Total LNG imports in India have doubled in the last 7 years from 8 MMT in 2008-09 to 16 MMT in 2015-16. Industry experts expect the imports to grow by 50% by 2020 at 24 MMT. The global LNG supply glut and drop in LNG prices has further favoured India’s appetite towards LNG which has resulted in a positive outlook towards a robust LNG imports scenario in the times to come.

Significant grounds expected to be covered in a short span…

The positive outlook towards a robust natural gas demand growth amid the ground realities such as domestic supply constraints, under-balanced gas pipeline and RLNG terminal infrastructure signals that significant ground needs to be covered in terms of infrastructure development and adopting innovative supply-chain approach towards penetrating gas markets through LNG. New disruptions are expected to happen in the times to come due to technological evolutions in storage and regasification of LNG at end-user point of use across industrial (ISO Containers and Cryogenic Storage) and transport segment (LCNG, LNG in M&HCV).

Key Questions Answered

  • What is the medium & long term outlook on domestic and imported gas mix and demand growth?
  • Why LNG suppliers need to look beyond the conventional demand drivers?
  • What are the LNG market creation opportunities in India and why they should be targeted?
  • How can LNG play a vital role as an auto fuel and transforming M&HCV segment?
  • What activities of the Indian Government that may encourage LNG trade?
  • What are the realities of impending infrastructural bottlenecks and supply-chain issues?
  • How has the Indian LNG imports performed in the recent past?
  • Which are the companies targeting LNG/Gas business in India and why they are doing so?
  • Why is the outlook on Indian LNG market looks promising?

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