Waiting for Chhara LNG at Gujarat Petronet
Gujarat State Petronet (GSPL) is impatiently waiting for Hindustan Petroleum to commission its Chhara LNG terminal so it can further reverse a three-year trend of falling gas transmission.
"When commissioned, Chhara should add 4m cm/d to GSPL's transmission volumes," predicts a GSPL source. However, commercial operations at Chhara are expected to begin only by June 2024.
During the pandemic, GSPL's transmission volumes fell from 13,349m cubic metres in 2020-21 to 12,369m cubic metres in 2021-22 and 9253m cubic metres in 2022-23. Only this year has the trend started to reverse amid falling LNG prices.
From January 1 (2024) to March 31 (2024), GSPL gas transmission volumes rose by almost 7m cm/d to 36m cm/d. From October 1 (2023) to December 31 (2023), GSPL gas transmission volumes were 29m cm/d.
"This sharp increase in volumes is the highest spike since August 2021," we hear. In the first three months of 2024, spot LNG prices averaged $9.5/mmbtu compared to an average of $15.7/mmbtu in October, November and December 2023.
Oil ministry figures reveal that all-India R-LNG consumption in February 2024 rocketed to 95.65m cm/d. "This is the highest in the last three years," we hear.
GSPL enjoys a unique advantage in that Chhara is connected only to its pipeline network and not to GAIL's network, in stark contrast to the Dahej or Hazira terminals, which are connected to multiple networks. In the short run, GSPL gas transmission volumes are expected to rise further by 4m cm/d because of increasing demand from gas-based power stations.
"Power demand shoots up when people use more AC during the peak summer months (April, May, June)," says a source. "Gas consumption in refineries is also rising."
Reliance, for example, has returned to buying LNG for its Jamnagar refinery and petrochemical complexes. Under a deal with GSPC, Reliance bought three cargoes on January 28 (2024), March 1 (2024) and March 13 (2024).
Additional gas volumes are also expected from Swan Energy's long-delayed 5m t/y Jafrabad FSRU-based terminal, which the company claims will be commissioned next year (2025).