India’s commissioning of floating LNG storage terminals to face further delays.

India could witness further delays in commissioning and expansion of its floating liquefied natural gas (LNG) storage terminals with a total planned capacity of 30 million tonnes per annum (MTPA).

The world’s fifth-largest LNG importer plans to add 30 MTPA of regasification capacity in a bid to import and store larger volumes of LNG to meet rising domestic demand.

“India’s 5 MTPA Jafrabad FSRU and 6 MTPA H-Gas LNG Gateway have postponed their start-up from previous years and may see further delays due to tight supply globally for FSRU vessels and tepid local LNG demand due to recently high and volatile prices,” the International Gas Union (IGU) said in the world LNG report 2023.

In the Jafrabad (Gujarat) FSRU, Swan Energy holds 32.12 per cent stake, followed by Indian Farmers Fertiliser Cooperative (30.87 per cent), Mitsui Group (11 per cent); Gujarat Maritime Board (15 per cent) and Gujarat State Petronet (11 per cent). The Jaigarh (Maharashtra) FSRU is controlled by H-Energy Gateway.

“Worth noting is that the floating terminals in India may face delays again this year due to the tight supply of FSRU vessels and increasing competition from European markets”, the report said.

To increase regasification capacity, five new floating storage and regasification units (FSRUs) and two expansion projects are under construction in India. Of the five new terminals, three are floating-based, reflecting the South Asian market’s preference for floating terminals, it added.

In October 2022, the International Energy Agency (IEA) had pointed out that rising demand in Europe has drawn away not only flexible LNG volumes from Asia but also the limited number of FSRU vessels available for hire in the foreseeable future.

“Even projects with firm FSRUs can see their vessel commitments withdrawn. Hoegh LNG, for example, has recently terminated its 10-year FSRU charter with the much-delayed Jaigarh LNG project in India, and is now expected to redeploy the vessel to a new European FSRU terminal later this year,” it had said.

HBL