MONTHLY REPORTJUNE 2021

LIQUID GASES UPDATE

PORT ANALYSIS 3

MARKET OVERVIEW AND TRENDS 7

KEY HIGHLIGHTS 8

Disclaimer,

The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation, no claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification of information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J. M. Baxi & Co. do not guarantee the quotes or other data and the same is provided only in good faith.

TABLE OF CONTENT

PORT ANALYSIS

3

LIQUIFIED GASES TRAFFIC AT INDIAN PORTS (QTY IN METRIC TONNES)

Port April - 21 April - 20 VARIANCE

COCHIN 135273 69500 65773

CUDDALORE 16302 8604 7698

DABHOL 437967 442923 -4956

DAHEJ 1045315 961786 83529

ENNORE 139058 171157 -32099

HALDIA 355491 384995 -29504

HAZIRA 70612 428473 -357861

JNPT 111000 81379 29621

KAKINADA 6850 8000 -1150

KANDLA 149027 170983 -21956

MANGALORE 182938 208820 -25882

MORMUGAO 5979 5979

MUMBAI 95000 89256 5744

4

MUNDRA 162081 280455 -118374

PARADIP 80559 80559

PIPAVAV 17703 23693 -5990

PORBANDAR 6971 6971

PORT BLAIR 840 840

RANPAR 12400 12400

SIKKA 20643 40907 -20264

TUTICORIN 25164 7000 18164

VISAKHAPATNAM 183532 148905 34627

Grand Total 3260705 3526836 -266131

MAJOR IMPORTERS OF LIQUIFIED GASES - MAY 2021(QTY IN METRIC TONNES)

IMPORTERS CARGO IMPORTS

BHARAT PETROLEUM COPRN. LTD.BUTANE 72313LIQUID PETROLEUM GAS 111916PROPANE 62901

COROMANDEL INTL. LTD.ANHYDROUS AMMONIA 23750LIQUID AMMONIA 25750

DEEPAK FERTILIZER AND PETROCHEMICAL CORPN. LTD. LIQUID AMMONIA 28500DHARANGADARA CHEMICAL WORKS LTD VINYL CHLORO MONOMER 4200FINOLEX IND.LTD. VINYL CHLORO MONOMER 6200GAIL INDIA LTD. LIQUID NATURAL GAS 349626GREENSTAR FERTILIZERS PVT. LTD. LIQUID AMMONIA 12000GUJARAT STATE PETROLEUM CORPN. LIQUID NATURAL GAS 338865

HINDUSTAN PETROLEUM CORPN. LTD.

BUTANE 80013GASOLINE 6500LIQUID PETROLEUM GAS 137867PROPANE 62247

INDIAN FARMERS FERTILISER COOP. LTD. LIQUID AMMONIA 9000

INDIAN OIL CORPN. LTD.

BUTANE 119325LIQUID NATURAL GAS 272727LIQUID PETROLEUM GAS 184036PROPANE 145071

KOLMAR PETROCHEMICALS AG PYROLISIS GAS 9780MANGALORE CHEMICAL AND FERTILIZERS LTD. LIQUID AMMONIA 5500MITSUBISHI CORPN. PVT. LTD. BUTADIENE 2884PARADIP PHOSPHATES LTD. LIQUID AMMONIA 5500PETRONET LNG LTD. LIQUID NATURAL GAS 728920RELIANCE INDUS. LTD. ETHANE 136000SHV ENERGY PVT. LTD. LIQUID NATURAL GAS 4100SHV GAS SUPPLY RISK MGMT. LIQUID NATURAL GAS 5500TORRENT POWER LTD. LIQUID NATURAL GAS 124178TOTAL OIL INDIA LTD. LIQUID PETROLEUM GAS 6563VITOL ASIA PTE LTD. PYROLISIS GAS 20372

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ORIGIN COUNTRY-WISE LIQUID GASES IMPORTS IN INDIA (QTY IN METRIC TONNES)

Country Cargo May - 2021

ANGOLA LIQUID NATURAL GAS 158174

BAHRAIN LIQUID AMMONIA 28500

BRUNEI LIQUID PETROLEUM GAS 840

CAMEROON LIQUID NATURAL GAS 162265

EGYPT LIQUID NATURAL GAS 69405

EQUATORIAL GUINEA LIQUID NATURAL GAS 70605

IRAN ANHYDROUS AMMONIA 14000

KUWAIT

BUTANE 22401

LIQUID PETROLEUM GAS 25000

PROPANE 23391

MOROCCO LIQUID AMMONIA 5500

NIGERIA LIQUID NATURAL GAS 276336

OMAN LIQUID NATURAL GAS 62000

QATAR

ANHYDROUS AMMONIA 7500

BUTANE 97816

LIQUID AMMONIA 22500

LIQUID NATURAL GAS 884561

LIQUID PETROLEUM GAS 71746

PROPANE 81026

VINYL CHLORO MONOMER 12400

SAUDI ARABIA

ANHYDROUS AMMONIA 2250

BUTANE 79853

LIQUID AMMONIA 29750

LIQUID NATURAL GAS 61440

LIQUID PETROLEUM GAS 145995

PROPANE 46516

SRI LANKALIQUID NATURAL GAS 5500

LIQUID PETROLEUM GAS 840

U.A.E.

BUTANE 61694

LIQUID NATURAL GAS 114948

LIQUID PETROLEUM GAS 112865

PROPANE 69082

UNITED STATES

BUTANE 9887

ETHANE 136000

LIQUID NATURAL GAS 210775

LIQUID PETROLEUM GAS 20000

PROPANE 10464

KEY HIGHLIGHTS » Crown LNG to develop LNG terminal offshore India

» Petronet to invest $2.6 billion for local expansion over 5 years

» India grapples with LNG oversupply as virus dashes demand

» Total signs deal to supply LNG to ArcelorMittal’s plants in Gujarat

» LNG market poised for buoyant recovery with demand growing across Asia

MARKET OVERVIEW

AND TRENDS

6

KEY HIGHLIGHTS

Crown LNG to develop LNG terminal offshore India

» Crown LNG Holding AS (Crown LNG), a Norwegian group which specialises in developing LNG infrastructure for harsh weather conditions, has initiated development of an LNG terminal offshore Kakinada, India.

Crown LNG specialises in LNG infrastructure for both LNG regasification and LNG liquefaction. Since its inception, the company has focused on development of a technical solution that can operate in more severe weather conditions than floating solutions. Crown LNG India AS, a subsidiary of Crown LNG Holding AS, has signed an agreement with East LNG; to finance, build and lease the infrastructure for their offshore LNG receiving terminal at Kakinada. Crown has also been contracted for operations and management of the facility, through the 25-year lease period.

Crown LNG has now initiated development of the Kakinada project.“We will build an LNG terminal that will be operational 365 days per year, including during the monsoon season, for 25 years following the completion of the terminal,” says Gunnar Knutsen, CEO of Crown LNG AS’, which is Crown LNG’s project services company.

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Safety firstThe LNG terminal will be built with an annual regasification capacity of 7.2 million tpy. It will support India’s gas initiative and help to reduce carbon emissions. Crown LNG intends to develop the LNG terminal as a gravity-based structure that sits on the seabed approximately 11 km offshore Kakinada. Not only will such a solution be able to withstand the harsh weather conditions the Indian monsoon season presents, it will also contribute towards decongesting busy ports and keeping hazardous substances away from populated areas. “By choosing this approach, we enable a 365-day operating window without placing unnecessary environmental and safety burdens on the local community in and around Kakinada. This is in line with our philosophy of acting responsibly wherever in the world we operate,” adds Gunnar Knutsen.

Access to the Indian gas marketThe lack of viable LNG facilities on the east coast has caused significant energy shortages for the eastern part of India; especially for high-volume energy users such as fertilizer, petrochemicals and power plants that are located in and around Andhra Pradesh. Many facilities have even been sit-ting idle due to lack of natural gas supplies. “The Indian government is dedicated to safeguarding the energy supply to domestic industry and consumers, while also facilitating a responsible energy transition. The Kakinada LNG project is proof of this,” says Jørn Husemoen, Chairman of Crown LNG Holding AS. Husemoen also underlines that the pipeline infrastructure near the project site is mature and therefore easy to connect to. This substantially supports the project.

Next stepsCrown LNG expects that the Kakinada project’s EPCIC contractor and key subcontractors will be announced during the coming weeks. The company is working towards a final investment decision (FID) for the end of 2022. Crown LNG estimates that the LNG terminal will be operational approximately three years after making a final investment decision for the project.

Project pipelineThe company, together with its partners, is working on various projects, including regasification terminals for other Asian locations, that experience similar cyclones and monsoons as in the Bay of Bengal. Crown LNG has also signed a letter of intent to deliver a traditional 5 million tpy FSRU to a gas to power project in the UK. In addition, the company is working on developing a project for a GBS-based liquefaction terminal for export of gas from US. Further information about this and other projects will be shared in due course.

Source: LNG Industry

Petronet to invest $2.6 billion for local expansion over 5 years

» India’s top gas importer Petronet LNG will invest $2.6 billion over five years to expand local infrastructure as investing in overseas projects is ‘not lucrative’ in the current liquefied natural gas (LNG) surplus market, its head of finance said

India’s top gas importer Petronet LNG will invest $2.6 billion over five years to expand local infrastructure as investing in overseas projects is ‘not lucrative’ in the current liquefied natural gas (LNG) surplus market, its head of finance said. “Right now, investment in LNG terminals anywhere outside India is not very lucrative because LNG is available at very low prices it is only recently that prices have increased... availability of LNG is plenty,” Vinod K Mishra said during an analyst call after the company reported its March quarter earnings. He said at the moment, there was no financial incentive to invest in overseas projects to lock in LNG supplies. The company was earlier planning to invest in projects in Sri Lanka, Bangladesh, Qatar and Tellurian’s Driftwood LNG project. India wants to raise the share of gas in its energy mix to 15% by 2030 from 6.2% and is raising its local output. Mishra said higher domestic supplies could hit costly spot LNG imports in the short term, but would not impact imports in the long term as India’s gas consumption is expected to jump. Petronet plans to invest ₹6,690 crore

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to expand its 17.5-million-tonne per annum (mtpa) Dahej terminal in the West coast to 22.5 mtpa, build a new terminal in the east coast and building new jetty and LNG tanks at Dahej and Kochi, he said. Mishra said in the first phase, the Dahej terminal will be expanded to 20 mtpa by mid-2023, while a new 5-mtpa Gopalpur terminal in the east coast is expected to be ready by 2025.

Source: Livemint

India grapples with LNG oversupply as virus dashes demand

» India’s liquefied natural gas importers are asking suppliers to defer deliveries as measures to curb the spread of the deadly Covid-19 virus have cut demand for the fuel

At least three companies — Indian Oil Corp., Gujarat State Petroleum Corp. and Petronet LNG Ltd. — have asked to delay shipments slated for May and June delivery, according to traders with knowledge of the matter, who requested anonymity as the discussions are private. Inventories at import terminals in western India, such as Dahej, are near full capacity, the traders said.The deferrals illustrate the extent of the natural gas glut in India, which has worsened over the past several weeks. While Indian firms have been accepting most contracted LNG deliveries, they have disappeared from the spot market since the virus worsened last month and shipments became too pricey. To make matters worse for suppliers, a cyclone in the vicinity of several import terminals in western India has also forced diversions and rearranged delivery schedules, said traders. More deferral from India could result in an oversupply of prompt cargoes in the spot market, which will weigh on prices that have rallied to the highest seasonal level in seven years. The Indian importers have requested deferrals from several days to weeks, the traders said.

Source: Livemint

Total signs deal to supply LNG to ArcelorMittal’s plants in Gujarat

» Under the deal, Total will supply up to 0.5 million tonnes of liquefied natural gas (LNG) per year until 2026, a company statement said.

French energy giant Total on Thursday said it has signed a deal to supply imported LNG to ArcelorMittal Nippon Steel’s (AMNS) steel and power plants in Gujarat. Under the deal, Total will supply up to 0.5 million tonnes of liquefied natural gas (LNG) per year until 2026, a company statement said. “The LNG will be sourced from Total’s global portfolio and offloaded either in Dahej or Hazira LNG terminal, on the west coast of India,” it said. “AMNS will use the LNG to run its steel and power plants located in Hazira, Gujarat state.” AMNS India is a joint venture between ArcelorMittal (60 per cent) and Nippon Steel (40 per cent) that acquired Essar Steel in bankruptcy proceedings in 2019. “We are pleased to partner with AMNS and to supply the growing industrial LNG demand in India, a country that aims to more than double the share of natural gas in its energy mix by 2030 compared to today,” said Thomas Maurisse, Senior Vice President LNG at Total. “The supply of LNG will contribute to the reduction of AMNS’s carbon emissions, in line with Total’s ambition to offer its customers energy products that emit less CO2 and to support them in their own low-carbon strategies.” While the pact strengthens Total’s relationship with AMNS, the supply of gas in its liquid form (LNG) will contribute to the decarbonisation of the steel industry, which still relies heavily on coal. Total is the world’s second-largest privately owned LNG player, with a global portfolio of nearly 50 million tonnes per year by 2025 and a global market share of around 10 per cent. It has interests in liquefaction plants in Angola, Australia, Egypt, the United Arab Emirates, the United States, Nigeria, Norway, Oman, Russia and Qatar, and markets LNG globally.

Source: ET Energy World

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LNG market poised for buoyant recovery with demand growing across Asia

» Higher oil and coal prices have also helped lift global gas prices with spot Asian LNG prices doubling in just three months.

Liquefied natural gas (LNG) prices are poised for more gains as gas-hungry China guzzles cargoes to feed a rebound in economic growth while the easing of coronavirus-induced restrictions restores industrial demand in India. Higher oil and coal prices have also helped lift global gas prices with spot Asian LNG prices doubling in just three months. “We believe this has been driven by a tightening of Asian LNG balances led by strong generation demand in southern China at the same time that South Korea reached peak nuclear maintenance, while Covid-hit India LNG demand has stabilized,” analysts from Goldman Sachs said in a note earlier this week. China imported more than 7 million tonnes of LNG in May, a record for that month, and looks set to import more over the next two months driven by strong industrial activity. “Fuel-switching (from coal) across households and businesses appears to have regained momentum after a brief hiatus, and now has an added policy boost ...that is heavily oriented around increasing clean fuels use and decarbonisation,” Fitch Solutions said. South Korea’s newest and biggest nuclear reactor, Shin Kori-4, shut last month after a fire, which is expected to boost LNG demand. An official at operator Korea Hydro & Nuclear Power Co said it was not clear when the reactor would resume operations. Tokyo Gas, Japan’s biggest city gas provider, may boost storage capacity using LNG tankers, chief financial officer Hirofumi Sato told Reuters in April, potentially lifting imports. Utilities in Japan, the world’s top LNG importer, faced a power crisis last winter which caused LNG prices to spike to record highs. Temperatures in Tokyo, Seoul and Shanghai are expected to be warmer than usual over the next two weeks, according to Refinitiv Eikon weather data, further boosting gas demand in Japan, South Korea and China for power generation. India’s gas consumption is seen recovering in June after declining in the previous two months, as states ease restrictions in the wake of a drop in coronavirus infections, officials said this week. Gas consumption in the world’s fourth largest LNG importer could grow by 6% to 8% in the current fiscal year if the country emerges from the pandemic, Manoj Jain, chairman of GAIL (India), India’s biggest gas pipeline operator, said. Europe’s LNG demand remains robust too, as imports are expected to refill storage levels which hit multi-year lows recently on pipeline supply concerns stemming from rising Russia-Ukraine tensions and a surging carbon market which may spur power producers to opt for LNG over coal, Fitch Solutions said. Supply issues, both planned and unplanned, plague some plants in the United States, Australia, Malaysia and Indonesia, and are also supporting prices, traders said. That’s crowding out some demand from price-sensitive buyers like Pakistan and Thailand, who have received only high offers for tenders seeking cargoes for July. Overall, Asia LNG prices are expected to average about $7.30 per million British thermal units (mmBtu) in 2021 and $7.50 per mBtu in 2022, up from $4.20 per mBtu last year, said Kieran Clancy, assistant commodities economist at Capital Economics. “The outlook for LNG demand further ahead remains bright, as it is used to plug the gaps in power generation that are not currently able to be met by renewables,” he added.

Source: ET Energy World

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OTHER REPORTS FOR

JUNE 2021

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