India Plans to Expand LNG Storage Capacity Amid Supply Disruptions from West Asia Conflict
Why LNG supply disruption due to West Asia war has pushed India to consider raising storage capacity
The Indian Express
Image: The Indian Express
The ongoing conflict in West Asia has disrupted liquefied natural gas (LNG) supplies, prompting India to consider increasing its LNG storage capacity. Petronet LNG's CEO, A K Singh, announced plans to enhance storage by approximately 70% to mitigate future supply shocks, as India relies heavily on imports from the region.
- 01India's LNG supply is significantly affected by the closure of the Strait of Hormuz due to the West Asia conflict.
- 02Petronet LNG plans to increase its storage capacity by about 70%, adding new tanks at its terminals.
- 03Currently, India has 23 LNG tanks, but they are not sufficient for emergency stockpiling.
- 04The construction of new cryogenic tanks will take at least three years and requires significant investment.
- 05Improving pipeline connectivity is crucial for optimizing LNG terminal operations and enhancing supply.
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The closure of the Strait of Hormuz amid the West Asia conflict has severely disrupted liquefied natural gas (LNG) supplies to India, leading to a critical need for increased storage capacity. A K Singh, CEO of Petronet LNG, announced plans to expand storage by 70%, emphasizing the importance of having adequate reserves to cushion against geopolitical shocks. Currently, India relies on LNG imports for about half of its natural gas needs, with 60% of these imports passing through the Strait of Hormuz, a major global energy chokepoint. With no LNG cargoes arriving from the Persian Gulf for over two months, the Indian government has prioritized gas supplies for essential sectors like transportation and households while rationing industrial use. Petronet LNG operates 23 LNG tanks across its terminals, but these are primarily for continuous operations rather than emergency reserves. Singh noted that building new cryogenic tanks is a lengthy and costly process, requiring at least three years for construction after obtaining necessary approvals. Additionally, enhancing the gas pipeline grid connectivity is essential for improving the operational capacity of LNG terminals and ensuring efficient supply distribution.
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Increasing LNG storage capacity is vital for ensuring energy security in India, particularly during geopolitical crises that disrupt supply chains.
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