India prepares to start new LNG import plant as demand rises

India is looking to purchase the inaugural shipment for its latest liquefied natural gas terminal, as the nation aims to rapidly increase consumption of the fuel this decade.

Gujarat State Petroleum Corp. released a tender to buy a commissioning cargo for the Chhara terminal for delivery in April, according to traders with knowledge of the matter. The facility in Gujarat state is being developed by Hindustan Petroleum Corp., and will have capacity to import 5 million tons per year of LNG.

New Delhi is trying to increase it ability to import LNG to lift the share of natural gas in its energy mix to 15% by 2030 from about 7% now. The move is to help lower the dependence on dirtier fossil fuels, such as coal and oil.

India currently imports LNG via seven terminals. Along with the Chhara facility, Swan Energy Ltd.’s Jafrabad import facility is also expected to begin operations this year, according to BloombergNEF.

Still, the Chhara facility isn’t expected to operate at full import capacity in 2024 due to monsoon season, as tankers can’t unload in choppy seas, according to people with knowledge of the matter. A breakwater facility, which is a barrier built out into the sea to protect a harbor from the force of waves, will be completed in April 2025 and allow for higher imports, one of the people said.