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India-based H-Energy has pledged to reshape the country’s LNG-import business model, positioning two floating storage and regasification unit (FSRU)-based terminals that will enable its customers to import gas in cheaper, smaller consignments.
Speaking exclusively to LNG World Shipping, H-Energy chief executive Darshan Hiranandani said the two planned FSRU-based import terminals will target India’s utilities and industrial users that need up to 1 million tonnes a year (mta) of LNG.
India imports large-scale volumes under long-term LNG-supply contracts through established import terminals at Hazira and Dahej, sourcing 60 per cent of its gas from Qatar. India imported nearly 20 mta last year, up from 14.4 million tonnes in 2015.
The International Energy Agency (IEA) has tipped India as the world’s fastest-growing LNG buyer. It expects India’s energy demand to match that of the US by 2040.
A newcomer to LNG imports, H-Energy has pledged to start small, taking advantage of cheaper supply. “We won’t be announcing any 15-year deals with the likes of RasGas,” Mr Hiranandani says. “Rather, we will [soon be] revealing the agreements for our first five or ten cargoes… We think the demand is there to create a broad base for our offtake.
“One option is commodity-based contracts, like coal- or ammonia-linked contracts, for example. Depending on the size of customer, we can be flexible.”
H-Energy announced last month that it will charter Engie’s 145,000m³, 2010-built FSRU GDF Suez Cape Ann from next autumn. It will base the FSRU at Jaigarh on India’s west coast, importing an initial 2 mta, taking delivery of the first cargoes in June next year.
H-Energy expects demand to double the imports through Jaigarh within five years to 4 mta. It is considering several options to meet that growth, replacing Engie’s small FSRU or building a land-based terminal.
It also plans to charter a second, larger 170,000m³ FSRU to import up to 3 mta of LNG through Digha in West Bengal on India’s east coast. Here, Mr Hiranandani expects initial demand of 1.5 mta, serving both West Bengal and neighbouring Bangladesh, increasing to 3 mta by 2025.
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