India’s LNG demand is projected to grow significantly, driven by an anticipated collapse in international spot LNG prices, which could prompt a shift from imported coal to LNG, Fereidun Fesharaki, chairman emeritus at FGE, said during APPEC 2025 in Singapore.
“Some very dramatic things can happen in India in the next three to four years,” Fesharaki said at the event, hosted by S&P Global Commodity Insights.
By 2027-2028, global spot LNG prices could drop from $11-$12/MMBtu to as low as $6-$8/MMBtu, he said.
“Prices can drop to $6/MMBtu, to $5/MMBtu, or $8/MMBtu … who knows?” he added.
Platts, part of Commodity Insights, assessed the JKM — the benchmark price for LNG cargoes delivered to Northeast Asia — for October at $11.497/MMBtu on Sept. 8, up 2.2 cents/MMBtu or 0.19% day over day.
Platts assessed the LNG West India Marker, or WIM, for October at $11.175/MMBtu on Sept. 8, at a discount of 32.2 cents/MMBtu to the October JKM assessment.
Fesharaki shared that the key issue in India is that LNG cannot compete with domestic coal at about $1/MMBtu.
“It does not matter how many international agreements you sign; the economics are so overwhelming with domestic coal,” he said.
However, imported coal in India currently costs around $8/MMBtu. If LNG prices fall below $8/MMBtu, demand for LNG is expected to rise, he said.
According to Fesharaki, India, the world’s second-largest importer of thermal coal and the fourth-largest LNG consumer, is likely to see a surge in LNG demand between 2027 and 2032.
“I expect that at least for five years from 2027-2032, there will be a big rush in India [for LNG], and India will get used to using LNG,” he said, adding that even if LNG prices rise later, demand is unlikely to decline.
Fesharaki also highlighted that if one looks at where the demand growth in Asia is going to be, India’s LNG demand growth is expected to outpace China’s in the coming years.
India aims to increase the share of natural gas in its primary energy mix from the current 6%-7% to about 15% by 2030 to meet its growing energy needs and advance its net zero pledge.
In 2024, domestic gas production rose 2% year over year to 3,525 MMcf/d, supported by peak output from Reliance-bp’s KG deepwater block 98/3 in the eastern offshore, according to an August report by Commodity Insights.
LNG imports climbed 21% year over year to 27.3 million mt/year in 2024, driven by softer prices, increased gas demand in the power sector, and reduced domestic gas allocation to city gas companies, the report said.
Commodity Insights forecasts India’s LNG demand to reach about 48.77 million mt/year by 2030.
Source: Platts