Pune Media
Leading the news curation and publishing for the people of Pune

ICRA forecasts stabilization in global natural gas markets for CY2023; projects 6-7% growth in India’s domestic consumption, ET EnergyWorld

New Delhi: Rating agency ICRA Ltd on Wednesday forecast that global natural gas markets are poised for stabilization in CY2023 after hitting record highs in CY2022, citing changes in demand across key consuming nations. The credit rating agency also projected a 6-7% year-on-year growth in India’s domestic gas consumption for FY2024.

Chinese demand for LNG has declined due to an economic slowdown, greater pipeline flows from Russia, and increased coal use. In the EU, demand has stabilized following mild winters, austerity measures, and a lackluster economic environment. Japan and South Korea have reduced LNG consumption as they turn more toward renewables and nuclear energy. U.S. domestic demand growth has been subdued, leading to moderated Henry Hub prices due to healthy gas inventory levels.

Sabyasachi Majumdar, Senior Vice President and Group Head of Corporate Ratings at Icra Ltd, warned of event risks such as labor strikes in Australian LNG facilities and a colder-than-expected winter in the northern hemisphere, which could result in spot price volatility. “Given the lack of investments in LNG projects over the past few years, incremental availability will be limited,” Majumdar said, adding that major capacity additions are only expected in FY2025-26.

In India, the gas utilities sector is seeing a return to stability after experiencing significant volatility. Improved LNG availability and softer prices are credited for this turnaround. An increase in domestic production, especially from the Krishna-Godavari Basin, is anticipated for FY2024, which will keep LNG imports in check.

The fertiliser and city gas distribution (CGD) sectors in India are expected to drive demand, according to ICRA. The agency also anticipates an uptick in industrial sector demand amid softer LNG prices and rising domestic gas production.

“The gas consumption in India is expected to grow by 6-7% YoY in FY2024,” Majumdar said. He cited new fertiliser plants commissioned in H2 FY2023 and a robust CNG segment as key factors contributing to this growth.

The Kirit Parikh Committee recommendations, implemented in April 2023, have lowered domestic gas prices, which is expected to further fuel demand in the CGD sector, especially for CNG and PNG(d).

  • Published On Sep 20, 2023 at 01:40 PM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Newsletter icon

Download ETEnergyworld App

  • Get Realtime updates
  • Save your favourite articles

Scan to download App

Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.

Aggregated From –

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More