India's April LNG Imports Rise 45%
Spurred by low international prices, India’s LNG imports have seen a 45 percent increase in the month of April, according to oil ministry data.
Asia’s third biggest economy imported 2,142 million metric standard cubic metres (mmscm) of LNG in April compared with 1,473 mmscm in the corresponding month last year.
Cost of importing LNG has dropped sharply this year after New Delhi signed a revised long term contract with Doha. Qatar is largest supplier of LNG to India. Given the backdrop of low global LNG prices, Petronet LNG insisted on renegotiating its long term contract with RasGas. In December, the two parties signed a revised deal. The revised formula bases the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that Petronet buys an additional 1 million tons of LNG annually. Qatar also waived off a $1.5 billion penalty against India for lifting less gas than agreed.
Cost of LNG that India imports from Qatar has slipped below $5 per mmBtu post signing of revised long-term deal.
Drop in domestic production
India’s domestic output continued to languish. Gas production in April was 2488.07 mmscm, down 6.83 percent on year.
The government is trying to encourage private sector companies, both global and local, to increase exploration activities.
From May 25th onwards India will begin inviting bids for 67 discovered small oil and gas fields clubbed into 46 contract areas spread over nine sedimentary basins in onland, shallow water and deep water areas. These fields have been discovered by India’s national oil companies and are now being offered under exclusive policy which is based on easy to administer revenue sharing contract model.
In March this year, India announced a new hydrocarbon exploration policy. The cabinet also announced a policy for future which provides for a uniform licensing system to cover all hydrocarbons such as oil, gas, coal bed methane, shale gas, shale oil, etc. under a single licensing framework, Hydrocarbon Exploration and Licensing Policy (HELP).
The government believes the new policy regime will mark a generational shift and modernization of the oil and gas exploration policy. It is expected to stimulate new exploration activity for oil, gas and other hydrocarbons and eventually reduce import dependence.