Shell urges India to tie-up long-term LNG

Vol 15, PW 11 (01 Dec 11) Midstream & Downstream

Shell has warned that unless India secures future LNG supplies fast it might fall behind in the global rush for energy security.

“India must ensure it ties up enough long-term LNG to cover its basic gas needs or it will lose out,” said Shell Hazira LNG general manager Surendra Pal, at an industry conference in Ahmedabad on November 17. “Even countries that used to export LNG, like Indonesia and Malaysia, are realising they need more LNG supplies themselves and are becoming LNG importers.

” Indonesia, he added, was one of the world’s largest LNG exporters until last year, with a capacity of 44m t/y. But the Southeast Asian republic is now frantically setting up three LNG import and re-gasification facilities, with capacities of up to 3.5m t/y in the provinces of East Java, West Java and North Sumatra.

Pal said the same is true of Malaysia, where a 3.8m t/y LNG import terminal is coming up in central Melaka state. He further points to Singapore, where industry sources say a 3m t/y LNG terminal is coming up at man-made Jurong Island.

Nearer to home, India’s closest neighbours Pakistan and Bangladesh could also be strong competitors for LNG, according to Pal. Pakistan is setting up a 3.5m t/y offshore LNG terminal at Port Qasim near Karachi, while Bangladesh is setting up a 5m t/y Floating Storage and Regassification Unit in the Bay of Bengal.

“India’s LNG sector must tackle the challenge by clearly identifying at what price to purchase LNG, where to buy it from, when is the best time to buy it, and how,” he said. “Identifying demand is not a problem.

It will always increase!” Pal predicted that by 2030 total gas demand in India could touch today’s unthinkable figure of 1000m cm/d.

LNG Summit