India’s LNG imports seen slowdown amid monsoon

India’s booming LNG imports are expected to slow as monsoon rains reduce electricity demand and increased hydropower generation displaces costly gas-fired power.

“Electricity demand won’t be as high as it was in May and June,” said Ayush Agarwal, LNG analyst at S&P Global Commodity Insights. India imported about 2.6 million tons of LNG last month, the highest since October 2020, due to affordable spot prices and high demand.

An emergency directive had increased gas-fired plant output by 63 per cent from April to June, but with its end on June 30, LNG imports are likely to decline.

July’s peak electricity demand averaged 207 gigawatts, leaving ample buffer for the 445 gigawatt generation capacity. Additionally, a 10 per cent increase in hydropower output is expected to further reduce the need for expensive gas-fired power.

Attribution: Bloomberg