India’s dependency on imported LNG has increased, indicated by stagnant domestic natural gas (NG) production and increased imports since 2008, opines Ind-Ra. The average imported LNG share was 45% of the overall domestic NG consumption in FY18, compared with 25% in FY08.
LNG imports increased at a CAGR of 9.2% to 73 million m3/d in FY18 from 30 million m3/d in FY08 due to sustained demand. The increased use of NG in fertilizer and power sectors coupled with growth of city gas distribution network has driven domestic NG consumption. On the other hand, domestic NG production has been stagnant at 90 million m3/d with a CAGR of 0.1% since FY08. This has led to increased reliance on the import of LNG, as domestic consumption has been gradually increasing.
Ind-Ra notes that LNG imports continue to increase despite the rise in Asian spot LNG prices since April 2016, thus indicating strong demand for NG and dependence on LNG imports to fulfil the same.
Furthermore, In June 2018, NG production was 2.8% y/y lower and NG consumption was 15.9% higher. During the month, production volumes of Oil & Natural Gas Corp. Ltd, Oil India Ltd and private/joint venture fields declined 1.1% y/y, 7.1% y/y and 7.1% y/y, respectively. The increase in consumption was on account of an increase in domestic demand. The domestic demand was met by a 39.0% y/y increase in LNG imports during June 2018. On a cumulative basis, LNG imports were up 19.1% y/y in 1Q19.
India’s crude oil production decreased 3.4% y/y in June 2018. During the month, the production volumes of Oil & Natural Gas Corp., Oil India Ltd and fields under production sharing contracts declined 4.6% y/y, 0.1% y/y and 1.7% y/y, respectively. Crude oil import volume increased 6.4% y/y during June 2018. India’s crude oil import dependency was 84.1% in June 2018 and 83.9% in 1Q19. Petroleum Planning & Analysis Cell (PPAC) estimates crude imports at 227 million metric t for FY19 (FY18: 220 million metric t).
In June 2018, refining throughput was 21.9 million metric t, up 9.1% y/y. The refining throughput was up 5.0% y/y in 1QFY19. Public sector refineries processed higher volumes on a y/y basis, supporting the overall increase in the throughput. During the month, India’s petroleum product output increased 12.0% y/y to 22.7 million metric t. On a cumulative basis, the production was 6.6% y/y higher in 1Q19.
Source: PPAC and Ministry of Petroleum and Natural Gas
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