India Plans LNG Storage Boost Amid Global Price Volatility
India plans to boost its liquefied natural gas (LNG) storage capacity by setting up an additional 15 overground tanks across the country. This will increase the nation's storage capacity by about two weeks, taking it from 12 days to 14 days.
The plan requires an investment of Rs.15,000 crore and is expected to add to the existing capacity of 60 days across more than 20 tanks. To support this project, the gas regulator may impose a surcharge of around 10% on pipeline tariffs paid by user sectors such as city gas and fertilizers.
The proposed storage comes at a time when India relies heavily on imports for nearly half its natural gas consumption. LNG imports have become more expensive due to supply disruptions caused by the war in West Asia, resulting in a sharp increase in India's gas import bill despite declining volumes.
Manas Majumdar, leader of the oil and gas sector at PwC India, said that apart from ensuring availability, storing natural gas is crucial for maintaining affordable prices during global price surges. He noted that if India imports LNG at a lower rate and stores it, 'it can be of great advantage when global prices are high.'
Industry experts believe that additional storage capacity will help protect consumers from sharp increases in prices during global price spikes.