Top importer explains why India is avoiding purchase of liquefied natural gas

Asian benchmark prices are currently above $11 per million Btu, and have been in the double digit range for much of the last five years.

Liquefied natural gas prices will need to drop markedly to spur more Indian demand, according to the nation’s biggest importer of the fuel.

Prices would need to be between $6 to $7 per million British thermal units for consumption in the South Asian nation to increase significantly, Petronet LNG Ltd. Chief Executive Officer Akshay Kumar Singh said at the India Energy Week conference in Goa on Wednesday.

Asian benchmark prices are currently above $11 per million Btu, and have been in the double digit range for much of the last five years.

India is potentially a massive market for LNG, but buyers there are price-sensitive and will opt for alternatives like coal or diesel if gas isn’t cheap enough. The country has the capacity to import nearly 53 million tons per year, but around half of that is unused due to a lack of affordable supplies and an underdeveloped pipeline network.

India will need 100 million tons of LNG import capacity to meet the government’s goal of boosting the share of gas in energy mix to 15% by 2030, from 6% now, Singh said. However, the country’s purchases are only likely to be around 29 millions tons this year, he said.