India’s import of liquefied natural gas (LNG) rose in volume term by 17.5% on year to 30,917 mmscm (million standard cubic meter) in the financial year 2023-24 due to increased consumption, data from the Petroleum Planning and Analysis Cell showed.
The rise in consumption by 11.1% on year in FY24 to 66,634 mmscm was driven by use of gas by the fertilizer, power, and city gas distribution sectors.
Even as the import volume reported such increase, the country’s gas import bill fell significantly by 22% to $13.3 billion in FY24 from $17.1 billion in FY23, as prices fell.
While the fertilizer sector contributed to 32% of the total consumption, CGD entities accounted for 19% of the total natural gas consumption, followed by the power sector at 12%.
In the fertilizer and other industries, natural gas is used as a feedstock and is also used as a fuel for electricity generation and heating purposes in industrial and commercial units.
Higher gas generation in the power sector was driven by higher peak thermal demand amid reduced hydro power generation. India generated 133,966.18 GWh of hydro power during April to March, a decline of 17% from 162,098.77 GWh in the same period a year ago, as per data from the Central Electricity Authority.
Moreover, the production of natural gas also grew by 5.7% on year to 36,438 mmscm in the financial year 2023-24. In March alone, the production stood at 3,138 mmscm, up 6.2% from the corresponding period a year ago.
India’s consumption of LNG is expected to rise further in the coming months on the back of growing demand from the fertiliser and power industries, analysts say. Anticipated lower spot LNG prices will further add to this growth.
“In Summer 2024, imports are expected to increase by a further 3 mmscm per day compared with 2023, driven by sustained demand in the power sector and continued growth in the industrial and fertilizer sectors,” S&P Global had earlier said.
The total capacity of the country’s existing LNG terminals at the end of FY24 was at 47.7 million tonne per annum.
The LNG terminal at Dhamra operated at 23% capacity. Petronet LNG terminal at Dahej operated at 95.1% capacity while Shell’s LNG terminal at Hazira operated at just 31.5% capacity during April-February period, according to PPAC.
