Government policies are driving demand for LNG in India, Bangladesh and Pakistan to help maintain growing populations and rapidly growing economies
LNG demand in India, Bangladesh and Pakistan is expected to mushroom over the next five years, driven in large part by clean energy policies. Much of the growth, says the International Energy Agency (IEA), will be driven by the industrial sector, especially for fertilisers to meet the agricultural demands of a rapidly growing subcontinent population.
Natural gas is expected to grow to 15% of India’s energy mix by 2030, supported by the government’s ‘gas-economy’ policies and surging LNG imports. By 2024, LNG imports to India are expected to be 54Bn m3, almost triple that of 2014 when they were 19Bn m3, according to the IEA.
Central to the government’s gas-economy scheme is increasing the country’s city gas distribution network, which grew from 66 districts in 2014 to 174 in 2018. Plans call for its expansion to over 400 districts in the coming years.
There is also a push for the use of compressed natural gas (CNG) for transportation, with expansion plans to grow CNG fuelling stations from 1,400 in 2018 to 10,000 in the next decade.
Currently, west and north India are the major consumers of gas in the country, but national gas grid pipelines are expected to reach major consumers of natural gas in the states of Assam, Arunachal Pradesh and Tripura in northeast India.
By 2030, overall natural gas demand from northeast India is expected to grow to 29.4M m3 per day (mmscmd), with an expected shortfall of 8.7 mmscmd according to the Hydrocarbon Vision 2030 for Northeast India report.
To meet this shortfall, an LNG import terminal is being developed at Dharma that would receive 5 mta of LNG. The terminal would supply the city gas distribution networks in eastern India and large fertiliser plants.
To handle the surge in LNG imports, India plans to add 11 LNG import terminals over the next seven years to its current four LNG import facilities.
Petronet LNG Ltd’s Dahej is the largest of India’s four existing LNG import terminals, with a nameplate capacity of 15 mta. It had a utilisation of 102.4% in April.
Dahej is set to boost the facility’s LNG throughput capacity from the current 15 mta to 17.5 mta. In a stock exchange filing the company confirmed it had commissioned the new facilities and “additional gas send-out from Dahej LNG Terminal has commenced.”
State-run Petronet has also commissioned a feasibility study for a third marine jetty at the terminal.
India’s Petroleum Planning & Analysis Cell (PPAC) reports that Shell Energy India’s Hazira terminal, with a nameplate capacity of 5 mta of LNG, had a utilisation rate of 92.4%, RGPPL’s Dabhol – with a capacity of 1.69 mta – 2.4% and Petronet’s Kochi terminal, with a capacity of 5 mta, 10.8%.
Last year, Shell took full ownership of the Hazira LNG terminal, after acquiring Total’s 26% in the facility.
RGPPL, a joint venture of India natural gas company GAIL and India electric company NTPC Limited, is expected to increase the nameplate capacity of the Dabhol terminal to 5 mta of LNG.
The opening of India’s newest LNG import terminal at Jaigarh has suffered a setback however, delaying its opening until Q4 2019, according to local reports.
Privately held H-Energy Pvt Ltd had expected to begin full commercial operations at its floating storage and regasification unit (FSRU) on Indian’s west coast by June. This was after delaying the project’s opening from 2018.
In June, Japan’s Mitsui OSK Lines, Ltd (MOL) confirmed a short-term charter agreement with GAIL for an LNG carrier.
One of the top utilities in Asia, GAIL is the largest pipeline company in India, with 11,400 km of cross-country existing trunk pipeline network and another 4,000 km pipelines under construction. GAIL has extended its presence in LNG regasification, city gas distribution and exploration and production through equity and joint venture participations.
GAIL is also diversifying into solar and wind power generation. It currently holds an LNG/RLNG portfolio of about 14 mta from various long- and short-term contracts.
Pakistan, with a population of 208M, is turning to LNG imports to alleviate the chronic energy shortages that have hindered its economy and led to a decade of electricity blackouts.
Qatar is already Pakistan’s biggest gas supplier, after signing a 15-year agreement to export up to 3.75 mta of LNG.
Pakistan’s two import terminals have a regas capacity of 1.2 to 1.3Bn ft3 of gas per day, or about 9 to 10 mta of LNG. Pakistan’s Port Qasim has been handling LNG imports since 2015.
Like India, Pakistan’s demand for LNG could more than triple in the next three to five years, according to Pakistan LNG managing director Adnan Gialani. Pakistan imported 7.1M tonnes of LNG in 2018, according to the International Gas Union.
State-owned Pakistan LNG has a tender for the supply of LNG cargoes on a delivered ex-ship (DES) basis at Port Qasim in Karachi. The tender calls for a contract for 10 years, delivering two cargoes per month for a total of 240 cargoes, each of 140,000 m3. Bids will be accepted up to 16 July.
The tender does not allow for conditional bids, meaning that one price has to be submitted for the entire term of the contract. The start date of the contract is between September 2019 and March 2020.
Bangladesh generates about 70% of its electricity from natural gas and close to 50% of the energy in the industrial sector is fuelled by natural gas.
In August last year Bangladesh joined Panama as the newest countries to start importing LNG when it started operations at its LNG import terminal offshore Moheshkhali island, utilising Excelerate Energy’s FSRU Excellence. The FSRU has a regas capacity of 3.75 mta and storage capacity of 138,000 m3.
Bangladesh’s second FSRU has begun operations at the Summit LNG Terminal, located offshore Moheshkhali Island in the Bay of Bengal. The FSRU provides a send-out capacity of 500M ft3 per day (mmscf/d) of natural gas, helping to meet Bangladesh’s growing energy needs in its strong economy.
In August 2017, Summit LNG Terminal Co Ltd entered into a 15-year charter agreement with US-based Excelerate Energy for the FSRU Summit LNG. In addition to providing the FSRU, Excelerate acted as the owner’s engineer in regard to the fixed infrastructure components of the terminal, which included a subsea plug, mooring system and subsea pipeline.
Summit Group founder chairman Muhammed Aziz Khan said: “With this additional 500 mmscf/d to the current 3,200 mmscf/d, we will be able to provide necessary primary energy to Bangladesh.” Mr Khan said Summit would invest US$3Bn in Bangladesh’s infrastructure over the next five years, in addition to its existing assets of about US$2Bn.