Indian’s natural gas production and consumption have shown signs of recovery in May, analysts at the India Ratings and Research (Ind-Ra) said in a new report on Monday.
The country’s total gas production recovered 6.4% month-on-month to reach 2.30 billion cubic meters (Bcm) in May. Consumption increased 10.9% m-o-m to 4.59 Bcm.
Demand was met by higher liquefied natural gas (LNG) imports, which rose 22.4% to total 2.38 Bcm, Kallanish Energy learns.
Despite the monthly signs of improvement, both production and demand remain lower than last year. Domestic gas output was down 16.05% year-on-year and consumption declined 9.8% y-o-y, the report said.
Indian gas buyers have been trying to take advantage of low LNG spot prices in Asia, while also trying to renegotiate contractual obligations with suppliers amid the Covid-19 pandemic and reduced demand.
“The decline in Henry Hub prices over the last one year has also aided the increase in LNG imports in this duration,” said Ind-Ra’s senior analyst Ankur Rustagi. “The Henry Hub prices reduced gradually to $1.6 per million British thermal unit (MmBtu) in June 2020 from $2.4/MmBtu in June 2019.”
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