Dahej overcapacity forces LNG import slowdown

Vol 15, PW 21 (03 May 12) Midstream & Downstream

Overcapacity at Petronet-LNG’s 10m t/y Dahej LNG terminal has severely hit the intake of spot cargoes and is affecting scheduled long-term LNG deliveries.

In April, only two spot cargoes landed at Dahej, one imported by Petronet-LNG on April 18 and the other by GAIL on April 19. GAIL’s 145,172-cubic metre cargo arrived aboard Kawasaki-built LNG carrier Neva River, flying the Bahamas flag, on its second visit to India.

GAIL sourced the cargo from Japanese LNG trader Marubeni under a deal signed in October 2010 for 24 cargoes spread across three years. Marubeni in turn sourced it through Russia’s Gazprom from Egyptian LNG.

Neva River, owned and operated by Japanese company K Line, has a 147,608-cubic metre capacity. Neva was loaded at Idku in Egypt on March 25 before setting sail for Dahej.

It departed Dahej after unloading on April 20. Since then no other spot cargo has landed as Dahej’s four R-LNG storage tanks, each with a 148,000-cubic metre capacity, continue to be full due to a seasonal drop in demand from fertiliser factories.

Don’t expect overcapacity to ease until end-May, when fertiliser producers are expected to recommence operations after routine summer maintenance shutdowns. Dahej’s R-LNG send out through GAIL’s trunk pipelines has fallen drastically from 29m cm/d to around 20m cm/d.

GAIL has been hit hard as Dahej’s largest R-LNG off-taker with a 60% share yet IndianOil and Bharat Petroleum are also suffering. GAIL’s next window to bring in a spot cargo at the Gujarat terminal is in July.

Gujarat State Petronet which sends out 10m cm/d of R-LNG on average from Dahej is hit too. Last week Petronet-LNG’s carriers Disha and Rahi were forced to divert to Fujairah in the UAE as Dahej couldn’t take their RasGas cargoes.