India's LNG Imports to More Than Double to 24 Mt by 2020, Says Moody's

India’s LNG imports is expected to double to 24 million tonnes per annum by 2020 from 10.7 million tons in the financial year ended 31 March 2014, Moody's Investors Service said in a report Tuesday.

Moody’s sees the expected surge in imports to benefit country's leading LNG importer, Petronet LNG Limited and dominant gas distributor, GAIL (India) Limited the most, because of the increased usage of their gas infrastructure.

"India's LNG imports should more than double to 24 million tonnes per annum by 2020 from 10.7 million tonnes in the financial year ended 31 March 2014, because of low and sustained LNG prices, rising industrial demand, and falling domestic gas production levels," said Abhishek Tyagi, a Moody's Vice President and Senior Analyst for the Public, Project and Infrastructure Finance Group.

"The stimulant effect on demand of lower LNG prices would be felt post 2017, because the fuel is mostly imported under long term contracts, which are generally linked to five-year average crude oil prices," says Vikas Halan a Moody's Vice President and Senior Credit Officer for the Corporate Finance Group.

Moody's report stated that the demand for LNG in India would be even greater if it were more widely used by the power generation sector, which currently absorbs only 10 percent of bulk imports because of the fuel's persistently high price relative to coal and domestic gas.