State-owned Petronet, which operates the 17.5 million ton/year Dahej LNG receiving terminal, plans to run the facility at reduced rates. Due to India’s 21-day national lockdown to curb the coronavirus spread, Dahej’s operating rates fell to 70% by Monday. Rates are estimated to have declined to below 50% this week, and will likely to fall further in the coming weeks.
An official at state-owned BPCL said that regasified LNG demand from Dahej has decreased by at least 30% since the lockdown. At the same time, storage capacity at Dahej is close to its maximum, while pipelines connected to the terminal are already running at capacity.
On March 25, Petronet said it would receive eight term and spot cargoes at Dahej until March 31. The company is negotiating to delay April term shipments by several weeks. Spot cargoes for April and May delivery are also expected to face deferral. At least 4 of 13 spot cargoes are due to arrive at Dahej in April.
Market participants are concerned whether May shipments to India will be affected, especially if the lockdown is prolonged and demand recovers slowly after the lockdown. GSPC canceled two purchasing tenders for seven cargoes for May 2020-March 2021 delivery to Dahej, reflecting the uncertainty whether Dahej can receive loads in May and beyond.
