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The future is here-I: No one really knows how gas demand in India is going to fare
Jun 21:
Experts continue to ponder over conflicting gas demand, supply and pricing parameters to make sense of what the future holds in store, both for the domestic producer of gas as well as for the supplier of LNG into India.
8The latest data shows that LNG import for the month of May, 2017 was 1,936 MMSCM which was 9.58 % lower than the corresponding month of the previous year.
8The price elasticity of demand is very high in India, making it difficult to sell high priced LNG in the market in the face of low crude prices and competitive liquid fuels
8Demand is only at around 200 mmscmd at a realistic delivered gas price of $7-8/mmbtu.
8Juxtaposed against this is the looming LNG supply glut, translating into lower LNG prices but the delivered price in India continues to remain high because of all kinds of bottlenecks including a stranglehold on infrastructure by a handful of monopolistic players.
8Then again, lower ex-Dahej LNG prices act as a ceiling price for fresh domestic production from the KG basin.
8Given how LNG prices are going to behave until the supply glut disappears in 2025, the breakeven KG Basin price will have to be less than $ 6/mmbtu.
8As a result of affordability, consumption is limited and so is the outlook for consumption going forward.
8There are other looming threats in the horizon, including the electric mobility revolution, distributed power supply and falling battery costs which will eventually also eat into the demand for gas.
For reference purposes, the website carries here the following reports:
8A price elasticity of demand analysis for Indian gas for different segments of Indian industry
8Gas switching costs for different segments of Indian industry
8Current LNG capacity and capacity utilization figures.
8LNG import costs
Click on Reports for more
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8The latest data shows that LNG import for the month of May, 2017 was 1,936 MMSCM which was 9.58 % lower than the corresponding month of the previous year.
8The price elasticity of demand is very high in India, making it difficult to sell high priced LNG in the market in the face of low crude prices and competitive liquid fuels
8Demand is only at around 200 mmscmd at a realistic delivered gas price of $7-8/mmbtu.
8Juxtaposed against this is the looming LNG supply glut, translating into lower LNG prices but the delivered price in India continues to remain high because of all kinds of bottlenecks including a stranglehold on infrastructure by a handful of monopolistic players.
8Then again, lower ex-Dahej LNG prices act as a ceiling price for fresh domestic production from the KG basin.
8Given how LNG prices are going to behave until the supply glut disappears in 2025, the breakeven KG Basin price will have to be less than $ 6/mmbtu.
8As a result of affordability, consumption is limited and so is the outlook for consumption going forward.
8There are other looming threats in the horizon, including the electric mobility revolution, distributed power supply and falling battery costs which will eventually also eat into the demand for gas.
For reference purposes, the website carries here the following reports:
8A price elasticity of demand analysis for Indian gas for different segments of Indian industry
8Gas switching costs for different segments of Indian industry
8Current LNG capacity and capacity utilization figures.
8LNG import costs
Click on Reports for more
