India’s liquefied natural gas imports grew 9 per cent year-on-year in March-September, as the US, Oman and Nigeria more than made up for lost cargoes from Qatar and the UAE. The shift protected supply volumes, but it came with a much higher price tag.
Key takeaways
- India’s LNG imports rose 9 per cent year-on-year during March-September.
- The US, Oman and Nigeria supplied about 68 per cent of India’s LNG in the seven months to September, up from 25 per cent a year earlier, according to commodity analytics firm Kpler.
- Qatar’s share fell to 3 per cent from 45 per cent, while the UAE’s dropped to 8 per cent from 14 per cent.
- More than a third of India’s LNG now comes from the spot market, where the Asian benchmark is around $30 per mmbtu.
India has managed to keep its gas flowing even after losing its two biggest LNG suppliers. The cost of doing so is where the story gets harder.
A new supplier map in just seven months
Before the Iran war, Qatar and the UAE were India’s top two LNG suppliers. Between March and September, deliveries from both fell sharply. A surge in cargoes from the US, Oman and Nigeria more than offset the loss, lifting India’s overall LNG imports by 9 per cent compared with the same period last year.
The numbers show how quickly the picture changed. According to Kpler, the US, Oman and Nigeria together accounted for about 68 per cent of India’s LNG imports in the seven months to September. A year earlier, their combined share was around 25 per cent. Over the same period, Qatar’s share collapsed from 45 per cent to 3 per cent, and the UAE’s fell from 14 per cent to 8 per cent.
Who gained, and by how much?
Looking at the period since the war began on 28 February, the Kpler data shows these changes in share of India’s LNG supply, compared with a year earlier:
- United States: 26 per cent, up from 11.5 per cent
- Oman: 22 per cent, up from 6 per cent
- Nigeria: 19 per cent, up from 7 per cent
- Angola: 9.5 per cent, up from 7.5 per cent
The US gain is partly the result of earlier planning. GAIL’s long-term LNG purchase contracts with US suppliers have helped lift America’s share of the Indian market.
What the analyst says?
Sonal Ranjan, an LNG and natural gas market analyst at Kpler, said the shift shows India can secure alternative supply. She added that holding import volumes steady has meant leaning more heavily on flexible international LNG markets and accepting elevated prices.
The price problem
The cost side of the equation is significant. Industry executives say India now sources more than a third of its LNG from the spot market, where prices have risen sharply.
- The Japan Korea Marker (JKM), the Asian spot LNG benchmark, is currently around $30 per mmbtu.
- It averaged $20 during March-September, compared with $12 in the same period a year earlier, which is roughly two-thirds higher.
- LNG bought under long-term, crude-linked contracts would be far cheaper. At the current Brent price of $110 per barrel, such LNG would typically cost around $14 per mmbtu, less than half the spot benchmark.
That gap explains why long-term contracts, like GAIL’s US deals, matter more in a disrupted market.
Who feels it most?
India’s LNG demand is driven mainly by the fertiliser sector, which makes an essential agricultural input and is therefore less sensitive to price increases. Fertiliser prices in India are not set by the market, so higher gas costs do not get passed on to farmers. Instead, they add to the government’s subsidy burden.
Demand has held steady
Despite higher prices, overall domestic gas consumption has stayed steady since the Iran war began. Expanding demand in the city gas distribution sector is a key support, helped by the growing adoption of CNG-powered vehicles. Industries are also switching to natural gas for more reliable supplies.
Why it matters?
India’s experience shows both the strength and the limit of its gas strategy. Diversifying suppliers has worked: volumes are up even though two major sources have shrunk. But a larger spot exposure means the import bill, and for fertiliser, the subsidy bill, now moves with a volatile global market. Long-term contracts remain the clearest hedge against that risk.
Frequently asked questions
How much did India’s LNG imports rise between March and September?
- India’s LNG imports rose 9 per cent year-on-year during March-September, according to the data cited in the report.
Which countries replaced Qatar and the UAE as India’s LNG suppliers?
- The US, Oman and Nigeria stepped up supplies. Together they accounted for about 68 per cent of India’s LNG imports in the seven months to September, according to Kpler.
How much of India’s LNG now comes from the spot market?
- Industry executives say India sources more than a third of its LNG from the spot market.
What is the current price of spot LNG in Asia?
- The Japan Korea Marker (JKM) is around $30 per mmbtu. It averaged $20 during March-September, against $12 a year earlier.
Why does higher LNG pricing matter for the fertiliser sector?
- Fertiliser is India’s main LNG-consuming sector, and its prices are not market-determined. Higher input costs therefore increase the government’s subsidy burden.
