The Panna offshore field restarted production from Monday. "We have resumed production from the Panna offshore fields," Rajiv Khanna, spokesman for field operator BG India, said. The field was shut down July 21 due to a leakage in a subsea pipeline.
Although production has been resumed, industry sources said that the output from the Panna field is less than half its original level of 5.8 million cubic meters/day and it would take time to reach full capacity.
But even as the Panna field resumed partial output, four major gas buyers went into turnarounds, further reducing demand for imported LNG, market sources said.
Essar Power, Essar Steel, Nagarjuna Fertilisers and Gujarat State Energy Generation all had shutdowns over October 11-18, the sources said.
As a result, state-backed LNG importer Petronet LNG had to divert an LNG cargo October 16 to avoid maxing out its storage tanks. When the outages ended in the following week, all four buyers again started drawing on gas from Petronet, mitigating the situation.
Meanwhile, state-owned gas company GAIL has continued with some spot LNG imports in the past few weeks, most recently receiving a cargo October 22, sources confirmed. Sources said the cargo was bought from BG Group and believed to have been sourced from Nigeria at a delivered price of $9/MMBtu.
Petronet itself has bought spot cargoes for November and December delivery from its usual term supplier Qatar's RasGas, sources said. It has offered its gas at a terminal gas price of $9.6/MMBtu to end-users, implying an ex-ship price of around $8.5/MMBtu, sources said.
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