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2024-05-16 06:50:00

INDIA NEED GAS

INDIA NEED GAS

PLATTS- May 10, 2024 - Above normal maximum temperatures and heat waves in parts of India are set to prop up gas-based power generation in the country, and possibly lead to more LNG inflows if prices stay around current levels, industry sources said in the week to May 10. 

"With the surge in power demand currently driven by increased temperatures, the power sector has witnessed a rise in the use of natural gas and specifically LNG to serve demand," an industry source in Delhi said. 

"But the heat is yet to peak in India. In May-June, the temperature goes up to 45 degrees [Celsius] in many cities in the north, and the peak power demand may touch 250+ GW, which currently has gone up to 214 GW in May so far," the source said, adding to cater increased consumption, gas-based generation has already increased substantially to 150 GWh/day. 

The Indian Meteorological Department in its monthly outlook May 1 said that normally the heat wave prevails over northern plains, central India and adjoining areas of peninsular India for about three days in May. 

However, during this month, the number of heat wave days is likely to be above normal by about 5-8 days over south Rajasthan, west Madhya Pradesh, Vidarbha, Marathwada and the Gujarat region and by about 2-4 days over the remaining parts of Rajasthan, east Madhya Pradesh, Punjab, Haryana, Chandigarh, Delhi, Uttar Pradesh and some parts of Chhattisgarh, interior Odisha, Gangetic West Bengal, Jharkhand, Bihar, north interior Karnataka and Telangana and isolated pockets of north Tamil Nadu, Andhra Pradesh, the IMD noted. 

The Indian government, earlier in 2024, issued an order applicable between May 1 and June 30 to increase power generation from gas-based power plants in anticipation of a power crunch this summer season.

Some sources said this will help serve part of the demand while the dependence on coal continues. The Central Electricity Authority's monthly coal statement of thermal power stations showed that total consumption in March was at 74.5 million mt, rising about 7% year on year.

According to the National Load and Dispatch Center data for May 6, gas-based power generation was at 157 million units, which is 3% of power generation in India. Comparing with the data for April 1, the generation was 102 million units, which was 2% of power generation in India.

A source at an Indian power company said that the gas consumption in India was nearly 15 million-16 million standard cu m/day currently and could up further if the summer weather stayed harsh.

"I think the power demand can go up to 18 million standard cu m/day this year for a brief period in Q3," said another source at a different power company in the country.

A domestic LNG buyer said: "Indian power demand is quite strong for the last 10 days...there should be more June-delivery tenders if the power consumption for gas continues at this pace."

NTPC Vidyut Vyapar Nigam Ltd. had issued a tender in January, and awarded it in March, for the supply of gas-based power from March onward which included the Platts West India Marker for LNG in the pricing formula.

GAIL awarded a DES India tender on May 2 near low-$10/MMBtu levels, largely to meet power related demand, sources said.

Platts, part of S&P Global Commodity Insights, assessed the JKM -- the benchmark price for LNG cargoes delivered to Northeast Asia -- for June at $10.499/MMBtu, up 15.2 cents/MMBtu on the day, and the JKM July derivatives at $10.70/MMBtu May 9.

Platts, part of Commodity Insights, assessed the West India Marker -- the benchmark spot price reflecting LNG delivered to ports of India's west coast -- at $10.15/MMBtu for June deliveries May 9.

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Tags: INDIA, GAS