S Asia to become fastest-growing LNG-import mkts

2017-06-28

South Asia will become one of the world’s fastest-growing LNG-import markets. Tapping that demand isn’t easy – but the potential is immense.

The subcontinent is on course to become one of the world’s fastest-growing markets for receiving LNG cargoes.

Last year, India and Pakistan posted the world’s third and fourth largest annual increases in LNG imports, lagging behind only Egypt and China.

In 2016, India imported nearly 20 million tonnes (mt) of LNG, increasing its intake by a whopping 39 per cent, according to a report published in http://www.lngworldshipping.com.

But regional demand is about to soar, as India and Pakistan invest in new import and distribution infrastructure – and as Bangladesh and Sri Lanka race to join them.

Bangladesh’s LNG-import plans are advancing even faster.

Moheshkhali floating LNG terminal was due to complete financing this year. Petrobangla has signed terminal use and implementation agreements with Excelerate.

The US-headquartered shipowner will supply a 138,000m³ FSRU to the project, to start early next year, importing up to 3.5 mta.

The project is billed as the world’s first fully integrated floating LNG terminal. Excelerate will provide all the services under a single deal. It has fixed the vessel, which it has yet to name, for a 15-year contract.

Bangladesh plans several additional import projects.

Also on Moheshkhali, Power Cell has invited bids for a 3.5 mta, land-based project. Power Cell wants an international partner to take up to 60 per cent of the project, awarded as an EPC venture. Petronet is shortlisted for the scheme, alongside Shell, Mitsui & Co and Chinese players.

However, Petronet has also signed an MoU to build a 7.5 mta import terminal on Kutubdia Island. The US$950 million project includes small-scale proposals to deliver LNG by barge and truck to off-grid customers around Bangladesh.

The race to deliver multiple projects across the Indian subcontinent highlights the region’s thirst for gas. Pinning down the demand and recouping investment is tricky. But there is no questioning south Asia’s appetite for chilled gas, to combat shortages and to meet growing power demand.

Analysts tip India as one of the world’s most exciting LNG-import prospects. The country’s four LNG-import terminals, which all lie on the west coast, can receive 30mt of LNG a year (mta).

But new projects are shifting the focus east, and opening a more flexible approach to imports.

New importer Pakistan is on course to open its second FSRU-based import terminal at Port Qasim and has chartered a third FSRU.

Now, it plans a fourth FSRU at the port to create the country’s first private LNG-import terminal.

Engro-backed Elengy Terminal Pakistan introduced the country to the LNG-importers club. In its first year, it received 1 mta using the 150,900m³ FSRU Exquisite, chartered from Excelerate to import up to 5.2 mta to 2030.

Sri Lanka may soon join the LNG-importers club, too.

It plans to take in LNG via Kerawalapitiya on the west coast, between Colombo and Negombo. The 2 mta project is valued at US$250 million.

A 300MW oil-burning power plant will switch to gas and a pipeline will encourage other industries to follow suit. Some reports suggest that Sri Lanka sees an FSRU as the best solution.

A 50/50 Indian-Japanese partnership will build the infrastructure. Sri Lanka sources have named Petronet the Indian partner. Plans for the joint venture were due to be finalised this summer.

Source: Financial Express

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