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LNG terminals in India: Long run risks are still there
Feb 06: A number of new LNG terminals are coming up in India.
8With low initial capacity utilization, the payback period of going to be stretched well into the future. And the asset life can potentially be as long as 40-50 years
8The asset owners also have to face the spinoffs from potential decarbonization efforts that will set in within this period.
8If climate change mitigation measures are fully adhered to, at least by some countries if not in India now, certainly by the mid-2020s - and arguably already - it will no longer be possible to sign contracts for methane exceeding 15 years (and even this duration may be difficult) unless it can be demonstrated that methane decarbonisation arrangements will be in place by the end of that period.
Another problem
8The long term price of delivered LNG will have to be between $6-8/mmbtu for it to remain competitive. How the industry will be able to achieve this remains a moot point
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