Good rains force R-LNG demand drop in July

Vol 19, PW 24 (11 Aug 16) Midstream & Downstream

Excellent rainfall this monsoon means India is generating more hydroelectric power and that's bad news for R-LNG demand.

For the second consecutive month LNG arrivals to India have fallen. Exclusive data compiled by PETROWATCH reveals 3,074,452 cubic metres of LNG landed at Dahej and Hazira from July 1 to July 31, spread across 21 cargoes including spot and term cargoes sourced from eight global liquefaction facilities.

This is lower than June's total of 3.21m cubic metres imported across 22 cargoes: a reduction of 135,548 cubic metres. "This is a marginal dip equivalent to a standard size tanker load," admits a Petronet LNG source.

"But it's a dip nevertheless." He explains R-LNG offtake slows during monsoon rains in June, July and August as hydroelectric power generation picks up. In India the share of hydroelectric power in the country's overall generation capacity increased from 10% in May to 15% in July as reservoirs and dams filled to the brim with monsoon rains, exceeding last year's levels.

India is the seventh largest hydroelectric power producer in the world with an installed capacity of 42,783-MW. Of the 3,074,452 cubic metres of LNG which came in during July, 2,466,415 cubic metres came in at Dahej over 17 cargoes while the rest came in at Hazira over four cargoes.