GAIL Highlights Growing India’s Liquefied Natural Gas Spot Buying in the India Energy Forum
- 29-Oct-2020 6:00 PM
- Journalist: Francis Stokes
Chairman of India's leading gas marketing giant, GAIL India Ltd. expressed his views in the recently held India Energy Forum conference held by the CERA Week and has raised expectations that the buyer’s interest in spot and short-term liquefied natural gas (LNG) contracts will rise after a considerable slump in spot offers has made long-term deals less attractive. Mr. Manoj Jain expressed huge optimism regardingLiquefied Natural Gas 's share in the country's overall energy mix in the future, considering favorable policies and efficient planning for new regasification infrastructure.
Currently, one third of the Indian Liquefied Natural Gas market is composed of spot contracts and two thirds are long term. Spot gas purchases for electricity generation sector, which account for nearly one fifth of the country's total fuel demand, doubled in Q1FY21 to their highest in the last 14 quarters, while purchases under long-term contracts plunged by one third to the lowest in the same period. In longer terms, it is being anticipated the buyers would be more inclined towards spot contracts than long ones.
India aims to increase the share of natural gas in its energy mix up to 15 per cent by 2030, an important step towards curtailing its carbon emissions. Several companies are making huge investments to build gas infrastructure including doubling pipeline capacity and setting up Liquefied Natural Gas import terminals.
India's gas consumption was 64.124 billion standard cubic metres in 2019-20 and to raise it by 15%, the country would have to step up its consumption by three times, which seems possible with the Indian government’s strong Atmanirbhar push and favorable policy regime.