More Dahej capacity as LNG demand picks up
Petronet-LNG's problems with overcapacity at its Dahej LNG terminal will soon be a thing of the past.
Not just because of the two new storage tanks but also because demand is set to increase from gas-fired power stations over the summer. For most of March 2024, Dahej's six LNG storage tanks were full to capacity because of low power sector off-take.
"Electricity demand was weaker than expected in March (2024)," says an industry source. However, power demand for air conditioning is rising, with temperatures crossing 40 degrees Celsius.
According to the Central Electricity Authority's report published in February 2024, the total installed gas-based power generation capacity stands at 25,038.21-MW. "As a rule of thumb, 4541 cubic metres of gas is needed to generate 1-MW of power," we hear.
With the tanks full to the brim, GAIL was unable to discharge an LNG delivery at Dahej in the last week of March 2024 and decided to divert it rather than keep the tanker at the anchorage. "I don't know where the cargo is diverted," adds our source.
"Perhaps they have sold the cargo to some overseas buyer." He explains the tank top-up problem was the fallout of a maintenance shutdown by four large fertiliser plants.
Meanwhile, everyone is scouting for LNG deals with prices below $10/mmbtu. "GSPC is bringing in three cargoes for state-owned (electricity board) Gujarat Urja Vikas Nigam's (GUVNL) gas-based power stations," says a source.
"GSPC is also looking at one, two, and three-year deals." Ahmedabad-based Torrent Power is expected to announce an LNG deal soon.
"I was expecting an announcement mid-March, but that hasn't happened," we hear. Steel maker AMNS is also scouting for a long-term deal.
According to S&P Global Commodity Insights, spot Asian prices averaged $9.82/mmbtu in the first three months of 2024 compared to $18.75/mmbtu in the same period in 2023. In the first three months of 2024, India saw 96 cargoes arrive compared to 70 in the same period in 2023.