Indian power plants used the most gas in at least 3-1/2 years in the June quarter, as operators along the west coast snapped up cheap liquefied natural gas (LNG) imports that have become competitive against coal, government data showed.
Power producers say the trend is likely to continue until at least September, and perhaps beyond, providing a bright spot for LNG sellers as demand elsewhere falls due to a global economic slowdown sparked by the coronavirus pandemic.
Gas consumption by power plants rose 11.7% to 104.83 million standard cubic metres per day (mmscmd) in the three months to end-June from the same period last year, data from the Central Electricity Authority (CEA) showed.
Imports accounted for 37.4% of overall gas consumption by power plants, up from 35% a year ago.
Lower spot prices are making natural gas “lucrative” for power plants, according to India’s largest gas importer Petronet LNG Ltd, which recently cancelled a tender to buy long-term LNG.
India’s imports of spot gas more than doubled in the June quarter from a year ago to the highest in at least 14 quarters, while purchases under long-term contracts slumped by over a third to the lowest in the same period, a Reuters analysis of the available data showed.