Austin WrightIndia's LNG imports are climbing through one of the priciest stretches for Asian gas markets in years, a trend that runs against the region's broader move toward coal, nuclear power and conservation.
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Why India Keeps Buying When Everyone Else Is Cutting Back
The backdrop is a supply shock that hit Asia hard earlier this year. Qatar halted natural gas production on March 2, and the Strait of Hormuz closed at nearly the same moment, wiping out roughly 5.5 to 6 million tonnes of monthly LNG supply, close to a quarter of the region's typical export flow before the disruption. Asian LNG imports sank to 18.8 million tonnes in April, the weakest showing since 2020, while JKM prices jumped from a pre crisis $10.4 per MMBtu to $25.3 per MMBtu by late March. South Korea trimmed monthly LNG purchases by 1 million tonnes between February and April, and Japan cut back by 1.5 million tonnes a month.
India took the opposite path. After slipping from 1.9 million tonnes in February to 1.67 million tonnes in March, its LNG imports rebounded to 2.1 million tonnes in May. That move looks even more unusual given that Qatar was India's dominant supplier, accounting for 11.2 million of the country's 25 million tonnes of LNG imports in 2025, or about 45 percent. With Qatari cargoes effectively gone, New Delhi turned to Oman, Nigeria and the United States to fill the gap. US shipments to India rose more than sixfold, from 137,000 tonnes in January to 907,000 tonnes in May, making Washington India's top LNG source. Nigeria doubled its monthly volumes to 480,000 tonnes by May, while Oman averaged around 500,000 tonnes a month in March and April before easing to 300,000 tonnes in May.
A Heatwave, Not Structural Demand, Is Driving the Numbers
What's pulling India back into the LNG market isn't a change in industrial gas appetite. It's the weather. Power consumption jumped more than 11 percent year over year to 164.98 billion kWh in May 2026 as temperatures topped 45C (113F) across wide swaths of the country, turning air conditioners and desert coolers into essential equipment rather than comfort items. Peak demand set records on four straight days from May 17 to May 21, culminating in an all time high of 270.82 GW on May 21, well above the previous May 2024 peak of 250 GW.
That surge exposed a structural gap in India's power system. Solar capacity has expanded fast, reaching 154.2 GW by April 2026 on the back of rooftop subsidies, large solar parks and incentives for domestic panel manufacturing. During the day, that abundance pushes electricity prices toward zero. But battery storage hasn't kept pace, so all that midday solar generation can't carry through to the evening and overnight hours when cooling demand stays high in the heat. On May 21, the day of the record peak, India still faced a 2.5 GW shortfall after dark.
Gas Fills the Gap Coal and Hydro Can't Cover
That nighttime gap is where LNG comes in, even at prices that make little commercial sense. India's Ministry of Power told all gas fired generation stations in early April to stand ready during heatwave conditions. Much of that fleet normally sits idle, since India leans heavily on domestic coal, which supplies roughly two thirds of electricity demand and, together with other thermal sources, accounted for about 71 percent of May's generation. Gas fired power typically contributes only around 10 GW during peak periods, against a maximum capacity near 20 GW, representing about 4 percent of installed capacity and just 1.5 percent of actual output.
The shortfalls occur at specific hours rather than around the clock, which is exactly the kind of gap gas plants are built to fill. Coal stations run best at steady, high utilization and can't easily ramp up and down for short windows, while gas units can. Even with JKM prices sitting near $18 per MMBtu, a level that offers little profit for generators, the government has arranged for Grid India to schedule gas station operating hours several days ahead, turning gas into emergency peaking capacity.
Coal can't absorb the entire burden either. Plants are already running near their limits, and about 2.1 GW of coal capacity is currently offline for planned maintenance or other outages. Coastal, import dependent coal stations have already ramped up, which explains why India typically imports more coal each late spring and summer. Hydropower, meanwhile, isn't much help right now. Large hydro makes up about 51 GW, roughly 10 percent of installed capacity, and can respond quickly without fuel costs, but reservoirs are low heading into the pre monsoon season. On May 30, hydro output measured 15 GW, 18 percent below the Central Electricity Authority's target.
What the Monsoon Forecast Means for Gas Demand
The monsoon season, which normally supplies about 70 percent of India's annual rainfall, usually refills reservoirs and eases pressure on the grid. This year looks different. A Super Nino pattern is expected to weaken the monsoon, potentially pushing rainfall to its lowest point in 11 years and delaying its arrival further into June. Weaker rains would also mean the heat lingers longer, extending the strain on the power system rather than resolving it.
India could, in theory, double gas fired generation from its current 10 GW to as much as 20 GW if conditions demand it. With temperatures running about 2C above seasonal norms over the past two months, June and July may bring another round of LNG purchases. The country isn't buying more gas because it's gotten cheaper. It's buying because coal, hydro and battery storage all have limits that gas alone can bridge during the hottest, darkest hours of the Indian summer.
