No end yet to Reliance LNG imports at Hazira

Vol 20, PW 14 (06 Apr 17) Midstream & Downstream

Good news for Hazira operators Shell-Total and gas transmission company Gujarat State Petronet: Reliance's grand plans to cut LNG imports have stalled.

In June 2015, Reliance boss Mukesh Ambani made a bold pledge to replace LNG imports with gas produced from pet coke through a $5bn pet coke gasification project meant to be commissioned at Jamnagar by early 2016. Fast-forward to today in April 2017 and there is no sign of the coke gasification project being commissioned anytime soon.

This means Reliance's LNG imports will continue at high levels into the near future. From January 1 to March 19 this year, Reliance brought in nine spot cargoes, more than any other LNG importer.

By contrast GAIL brought in eight cargoes, GSPC imported seven, and Petronet LNG and IndianOil each landed two. In 2016, Reliance brought in 5.81m cubic metres of LNG across 40 cargoes.

"I don't see any possibility of the coke gasification project getting commissioned soon," says an analyst tracking Reliance. "The spread (difference) between the LNG and pet coke gas price is already reducing." This LNG price downslide means Reliance's import volumes are likely to increase over April, May and June.

"Any cut in Reliance LNG intake would have hit Shell and Total," says a source. "Reliance is their biggest customer." Inevitably, more LNG at Hazira translates into more gas transmission volumes for Gujarat Petronet.