India's LNG imports surged by 26% in January: Here's why
India registered 26% surge in liquefied natural gas (LNG) imports this January compared to the same time last year, thanks to a decline in global prices boosting domestic demand. India imported 2.4 billion cubic meters (BCM) of LNG in January, a significant increase from last year's 1.9 BCM. From April to January, imports rose by 15% over previous year. Domestic gas use increased by 10% from April to January and 14% year over year in January.
Factors driving increased LNG demand
The primary reason for the increase in domestic consumption is the drop in international prices. The North Asian spot LNG benchmark, JKM, fell from $19 per MMBTU (Metric Million British Thermal Unit) to $9 within a year. As a result, price-sensitive Indian consumers can take advantage of favorable conditions. The price drop is due to factors such as mild winters in the northern hemisphere, lower-than-expected LNG demand from China, rise in global gas supply, and increased gas storage in Europe.
Impact on industries and import terminals
India's fertilizer industry is the largest consumer of natural gas, relying on imports for three-fourths of its needs. City gas firms and power producers follow as the second and third largest consumers. The growing demand for LNG is also leading to higher capacity utilization at import terminals. Dahej, India's largest LNG import terminal, operated at 96.5% capacity during the October-December quarter, a record for the winter season. This capacity is expected to rise in summer.
