DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/3fhwps/indian_natural) has announced the addition of the "Indian Natural Gas Market, Global LNG Trade Dynamics and Economic viability of R-LNG in India" report to their offering.
The share of LNG in total natural gas consumption in India reached 25.5% in FY12 and increased to 30% in FY13. The fall in domestic gas production in recent years has forced many gas consumers to evaluate the viability of using R-LNG to bridge the gap. The government's decision to increase the price of domestic natural gas from April 2014 has further complicated things for natural gas consumers. Domestic gas prices are expected to double to around $8.5/MMBTU from $4.2/MMBTU currently. The domestic gas production is not expected to increase substantially over the next 3-4 years.
Keeping in view the scarcity of domestic gas, this report has assessed the competitiveness of imported LNG with various liquid fuels based on the energy content and price. Based on the price of alternative fuels, the viability of using imported natural gas for various industries has been analysed.
Gas based power stations around the country are operating at low PLF's due to unavailability of gas and are in danger of defaulting on their debts. Gas based power plants will find it extremely difficult to compete with coal power plants in the future. The recent debacle in the power sector will reduce the pace of investment in gas power plants. With coal prices in the range of $2-3/MMBTU, domestic gas priced at $8.5/MMBTU and imported gas price of $16-20/MMBTU, the cost of generation from gas power plants will be significantly higher than that of coal power plants.
The fertilizer sector will also have to adapt to the new pricing paradigm. Naphtha prices are currently trading around $26-27/MMBTU in India but the subsidies doled out by the government makes it a viable option when compared to Natural gas. Natural gas becomes uneconomical for the fertilizer sector at import prices of about $19-20/MMBTU. Under these circumstances, fertilizer producers may find it cheaper to set up plants in the US and Canada to take advantage of the low gas prices prevailing in North America and then import the finished products into India.
Sectors such as Steel, Refineries and CGD had to increase dependence on imported LNG in FY 2013 as they are assigned a lower priority in gas allocation as per the government's gas utilization policy. The CGD sector used imported LNG to fulfill more than half of its gas requirements in FY12 and FY13. The share of imported LNG in the refineries and steel sectors was around 65-75% in FY12 and increased to around 75- 80% in FY13. At high LNG prices of around $20/MMBTU, refineries may find it more economical to replace natural gas with Furnace Oil to reduce costs.
Key Topics Covered
- Executive Summary
- Overview of Global LNG Trade
- Global LNG Infrastructure
- Indian Natural Gas Market
- Overview of Indian LNG Imports
- LNG as a replacement for liquid fuels
- LNG affordability by Sector
Companies Mentioned
- Petronet LNG
- Gail
For more information visit http://www.researchandmarkets.com/research/3fhwps/indian_natural
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