LNG imports up 9% in Mar-Sep; US, Oman & Nigeria bridge supply gap

New Delhi: A surge in liquefied natural gas (LNG) shipments from the US, Oman and Nigeria helped India more than offset the loss of deliveries from Qatar and the UAE, its top two suppliers before the Iran war, lifting overall imports 9% year-on-year during March-September.

The US, Oman and Nigeria accounted for about 68% of India's LNG imports in the seven months to September, up from 25% a year earlier, according to commodity analytics firm Kpler.

Qatar's share fell to 3% from 45% during this period, while the UAE's declined to 8% from 14%.


"The shift demonstrates India's ability to secure alternative supply, although maintaining import volumes has required greater exposure to flexible international LNG markets and elevated prices," said Sonal Ranjan, LNG and natural gas market analyst at Kpler.

Since the beginning of the war, on February 28, the US has accounted for 26% of India's LNG supplies, up from 11.5% a year ago. Oman's share rose to 22% from 6%, while Nigeria's increased to 19% from 7%. Angola's share expanded to 9.5% from 7.5%.

GAIL's long-term LNG purchase contracts with US suppliers have helped boost America's share of the Indian market. India's LNG demand has been driven mainly by the fertiliser sector, which produces an essential agricultural input and is therefore less sensitive to price increases. Fertiliser prices are not market-determined in India, meaning higher production costs add to the government's subsidy burden.

India is currently sourcing more than a third of its LNG from the spot market, where prices have skyrocketed, industry executives said. The Japan Korea Marker, the Asian spot LNG benchmark, is currently around $30 per mmbtu. It averaged $20 during March-September, up from $12 in the year-ago period.

By comparison, LNG procured under long-term contracts linked to crude oil would have been much cheaper. At the current Brent price of $110 per barrel, long-term LNG would typically cost around $14 per mmbtu, well below the spot benchmark of $30.

Overall domestic gas consumption has remained steady since the beginning of the Iran war despite higher prices, supported by expanding demand in the city gas sector. Growing adoption of CNG-powered vehicles is boosting consumption, while industries are also switching to natural gas for reliable supplies.