Soaring gas prices pause LNG infra development across GQ

Soaring prices of liquefied natural gas (LNG) has forced Bharat Petroleum Corporation to delay its investments in setting up of LNG stations across the Golden Quadrilateral highways, says Arun Kumar Singh, CMD of the company. 

“Unless the prices cool down there will be no appetite for LNG amongst truck operators,” Singh told Autocar Professional during the post-69^th AGM interaction with the media, while at the same time remaining hopeful of global prices to come down in the next 18 months. At present, 10 of  BPCL’s LNG stations are nearing completion, though its launches will also be delayed, the top company executive added.

Contextually, the spiralling global LNG prices arising primarily out of the ongoing Ukraine-Russia war threatens to derail India’s aspirations of increasing gas utilisation from its current levels of 6.5 percent to 15 percent by 2030. As per industry estimates, India’s LNG imports fell 8.5 percent during the first half of the current financial year in comparison to last year as the spot prices have more than doubled in the last few months to about USD 40 per mmBtu (metric million British thermal unit). 

When the project was first envisaged in late 2020, LNG prices were hovering at about 40 percent cheaper than diesel and thereby more suitable for longer routes resulting in around Rs 2,00,000 per annum of savings for truck operators. The Petroleum ministry had in November 2020 announced plans for setting up nearly 1000 LNG stations though the short-term aim was to initially set up 50 such stations, of which 20 were to be set up by IndianOil, 11 each by Hindustan Petroleum Corporation and Bharat Petroleum Corporation, six by GAIL India and two by Petronet LNG.