PremiumMumbai: India's liquefied natural gas (LNG) demand could rebound to pre-covid-19 levels by early 2022 as the economy recovers, provided spot prices soften and the country is able to repel any subsequent waves of covid-19 infections, according to a report by S&P Global Platts.
India has emerged as a key participant in the LNG marketplace and despite being price-sensitive, it has set the floor for spot LNG prices by picking up cargoes every time prices begin to drop.
Due to their price sensitivity, the positioning of Indian importers in the spot market is a key indicator of the price direction, and recent tenders have often served the purpose of testing market levels when the price trajectory is uncertain.
"Interestingly, while LNG prices are expected to remain high through this winter, importers like state-run Petronet LNG expect buying opportunities to emerge fairly quickly," said S&P Global Platts.
The S&P Global Platts JKM price for spot LNG had breached $17 per million metric British thermal unit (mmBtu) in the week to 16 August, before easing to $16.552/mmBtu on 19 August.
India's LNG import terminal capacity stands at 42.5 million mt/year, according to the oil and gas ministry. India is targeting 70 million metric tonnes (mt) a year import capacity by 2030 and 100 million mt per year by 2040, and raising the share of natural gas in the overall energy basket to 15% by 2030, from the current level of 6.3%.
