India’s Liquefied Natural Gas (LNG) imports declined 9.1% from a year earlier to 68 million metric standard cubic meter per day (mmscmd) in February 2019, according to a report by India Ratings and Research (Ind-Ra).
This happened despite a reduction in Henry Hub prices. “The Henry Hub prices reduced gradually to $2.7 per metric million british thermal unit (mmbtu) in February 2019 from $4.0 per mmbtu in November 2018. This is in contrast to the historical trends seen where LNG imports have increased on a reduction in Henry Hub prices,” the report said.
According to the research and ratings agency, the marginal improvement in domestic natural gas (NG) production in the past few months coupled with a reduction in consumption demand was likely responsible for the trend of LNG imports.
Henry Hub prices again increased in March 2019, which could have further led to a reduction in LNG imports in the month. LNG prices moderated in January and February 2019, owing to a reduction of the winter season demand which generally peaks in the months of November and December.
Crude oil production in India decreased 6.1% from a year earlier in February 2019. During the same month, the production volumes of ONGC and Oil India declined 5.1% and 6.5% year-on-year, respectively, and that of fields under production-sharing contracts fell 8.3% year-on-year.
According to the report, in February 2019, LNG production increased 3.3% year-on-year. During the same month, Oil and Natural Gas Corporation (ONGC) registered an 8.5% year-on-year rise in NG production volume, while Oil India and private/joint venture fields recorded a fall of 2.7% and 14.0% year-on-year, respectively.
“The NG consumption decreased 2.2% year-on-year and was in line with the 9.1% year-on-year decrease in LNG import volumes. On a cumulative basis, LNG imports were up 4.3% year-on-year during April-February 2019. In March 2019, the average Henry Hub natural gas price increased 14.5% year-on-year and 14.6% month-on-month,” the agency said.
In February 2019, crude oil import volume decreased 2.9% y-o-y and India’s crude oil import dependency was 84.4%. “Petroleum Planning & Analysis Cell estimates crude imports at 229 million metric tonnes (mmt) for FY19. The average Brent price increased 7.7% m-o-m to $64.0/bbl due to a 1.2 million bbl/day production cut announced by OPEC, effective from January 2019,” the report said.
India’s petroleum product output decreased 0.7% year-on-year to 20.3 mmt in February 2019. On a cumulative basis, production was up 3.0% year-on-year during April-March 2019.