Clean fuel focus in India may open door for US LPG imports

Mumbai: India’s increased focus on cleaner cooking fuel may open the door for imports of liquefied petroleum gas (LPG) from the US, according to Facts Global Energy.

The world’s second largest importer of the fuel raised its target for providing free cooking gas connections to the poor by 60% to 80 million families, finance minister Arun Jaitley said in his budget speech on Thursday.

“As LPG demand in India increases, we may see U.S. LPG cargoes coming to India. It may happen this year or next,” said Ong Han Wee, the Singapore-based head of the LPG team at Facts Global. “Aside from Iran, the supply growth will remain flat in the Middle East. India import requirements may eventually be greater than what Middle East can supply.”

The oil and gas consultancy estimates LPG demand in India will grow by a million tons in 2018. Consumption expanded more than 8% to nearly 23 million tons last year, with imports making up more than half those requirements.

Shipments have surged in the past two years under a government program to provide free LPG connections to women from families living below the poverty line. That’s helped the nation overtake Japan as the world’s second-largest importer of LPG, still trailing China.

Most of India’s LPG purchases are from Saudi Arabia, Qatar, Oman and Kuwait. The country got its first cargo of crude and ethane from the US last year and of liquefied natural gas the year before that.

Prime Minister Narendra Modi’s administration is attempting to reduce the use of polluting fuels such as wood and cow dung, which cause 1.3 million premature deaths in India every year, according to the World Health Organization.

“With the expansion, we will be able to extend cleaner fuel to almost 100 percent of the poor households in the country,” Jindal saidlivemint