Surge in LNG Imports Driven by Power and Fertiliser Sectors
NEW DELHI: India’s liquefied natural gas (LNG) imports surged 17.4% in October, reaching a record 2.7 million tonnes. This increase is driven by heightened demand from the power, fertiliser, and city gas distribution sectors, along with a rebound in supplies from Qatar and the UAE, according to data from maritime intelligence firm Kpler.
Crude imports also hit a record high of 5.6 million barrels per day (mbd) in October, marking a 14% increase compared to the same month last year. Russia continues to be the largest supplier, despite a decline in shipments, while imports from West Asia and the Atlantic Basin have also risen.
Increased Dependence on Imports
India’s LNG import dependence has climbed from 50% to nearly 52% as domestic production declines. Companies are reportedly stockpiling gas for the power sector, anticipating a drop in solar energy output during winter months. The fertiliser sector is also expected to require more feedstock for production.
The rise in LNG imports is largely attributed to a significant rebound in supplies from Qatar, which had faced disruptions in shipments through the Strait of Hormuz due to regional conflicts. Qatar has historically supplied 40-50% of India’s LNG imports. In October, India received over 0.4 million tonnes from Qatar, the highest volume since the onset of the conflict, representing a 370% increase from the previous month.
Competitive Supply Landscape
Despite challenges in its production facilities, Qatar is committed to increasing LNG supplies to meet long-term customer obligations. The United States remains the largest LNG supplier to India, providing 0.6 million tonnes as of October 29. Other notable suppliers include the UAE, Oman, Angola, Nigeria, and Australia.
In the crude market, Russian imports have decreased from a peak of 2.8 mbd in July to nearly 2 mbd in October. Nevertheless, Russia still accounts for approximately 36% of India’s total crude imports. Kpler’s lead analyst, Nikhil Dubey, noted that elevated freight costs for Russian barrels have diminished their price advantage, while improved supplies from West Asia present competitive alternatives for refiners. In October, supplies from Gulf countries reached around 2.3 mbd, down from 2.7 mbd in September, with Saudi Arabia leading the exports, followed by Iraq.
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