The commissioning of Indian Oil Corporation (IOC) Ennore LNG terminal marks the beginning of India doubling its regas capacity to 56.5 million metric tonnes per annum (mmtpa) by 2025.
“IOCL has already secured captive customers for 2 mmtpa of capacity. The Ennore terminal will help fast-track IOCL’s city gas distribution plan, as gas from the terminal will be supplied to consumers around Chennai and Madurai,” a WodMac analyst said.
According to Kaushik Chatterjee, the Ennore LNG terminal could become integrated with India’s national gas network via a pipeline to Vijayawada or Kakinada in Andhra Pradesh.
“Historically, delays in intra-state pipeline construction have impeded gas and LNG usage in India. The pipeline connecting the Kochi regas terminal in Kerala to Mangalore in Karnataka is a glaring example,” Chatterjee said.
IOC is already planning to connect remaining refineries to gas pipelines, which will likely at least double its gas demand. IOCL has signed a 0.7 mmtpa contract with Mitsubishi for 20 years, with supply coming from Cameron LNG in the US.
The analyst believes the facility will open the doors for IOC to source more LNG directly rather than through its compatriot Petronet LNG.
WoodMac notes India’s regasification capacity has been constrained in recent years with Dahej and Hazira LNG import facilities operating at maximum capacity throughout 2018.
There are several developments coming online that would push India’s regas capacity will reach 56.5 mmtpa by 2025 from the existing 25.5 mmtpa.