Declining LNG Price Pushed Indian Oil Corporation to Procure More LNG

India: Indian Oil Corporation, biggest refiner of India, is increasing its liquefied natural gas (LNG) business in the country. As the spot LNG prices has declined by 60% since October 2014 due to supply glut, the company is looking forward to procure more LNG from global market. Indian Oil Corporation is planning to buy two LNG shipments per month from the spot market for six months from October to cater the demand coming for fertilizer, power plants and glass industries at affordable prices.

TechSci Research depicts that boosting of LNG supply in the country, would create the demand of LNG for various end-users such as power, industrial, fertilizer and city gas distribution. Moreover, increasing focus on expansion of gas pipeline infrastructure, rising demand for natural gas from power and industrial in addition to favorable government policies is making LNG a commercially viable fuel for an increasing number of end users industries in India. Thus, LNG demand is forecast to witness robust growth over the next 5-10 years.

According to a recent released report of TechSci Research, “India LNG Market Forecast and Opportunities, 2025”, Upcoming LNG terminal projects, surging demand for natural gas in India and cost-effectiveness of LNG as compared to other alternative fuels are among the major factors anticipated to positively influence the country’s LNG market scenario over the next ten years. Government has also announced revised guidelines in “Gas Allocation Policy” to prioritize natural gas supply to various end-user segments that include City Gas Distribution for households and transport sector, fertilizers sectors (urea plant), power plants and industrial sector.