India\u2019s liquefied natural gas buyers are seeking decades-long supply deals to protect them from price surges, a move that will support the government\u2019s plan to boost the fuel\u2019s use.<\/p>\n
Importers are accelerating efforts to lock in fuel, according to traders and executives. Buyers including Petronet LNG Ltd., GAIL India Ltd. and Indian Oil Corp. are in talks with suppliers in the US, Qatar and the UAE for deals that last for 20 years. The trend is a reversal for the nation, which hasn\u2019t signed a long-term deal since 2021, according to contract data from BloombergNEF.<\/p>\n
That should help reduce their exposure to the volatile spot market \u2014 where prices surged to a record last year and made the fuel too costly for many buyers. It also increases the prospect of imports rebounding in a boost for Prime Minister Narendra Modi\u2019s strategy to more than double the share of gas in the country\u2019s energy mix by the end of the decade to help reduce pollution.<\/p>\n
\u201cThe lesson learned by the consumers is that they can\u2019t run the business based on spot,\u201d Akshay Kumar Singh, chief executive officer of Petronet LNG, said earlier this month. \u201cGoing forward, we will be finding a lot of long-term contracts signed by different stakeholders.\u201d<\/p>\n
India\u2019s consumers \u2014 from power plants to petrochemical facilities \u2014 are highly price-sensitive as gas competes head-to-head with cheaper and dirtier alternatives, but had become too dependent on the spot market, which was far more expensive than long-term contracts last year. The nation\u2019s LNG imports plummeted by nearly 20% after Russia\u2019s invasion of Ukraine upended the market.<\/p>\n
While LNG rates have since dropped and India is again purchasing spot shipments, that may not last. Prices are slated to increase in the second half of 2023, impeding demand growth, according to Ayush Agarwal, LNG analyst at S&P Global Commodity Insights.<\/p>\n
Petronet is in the middle of negotiations with Qatar to extend an existing deal at a lower price and secure additional volumes, according to executives at the firm, who asked not to be named as the talks are ongoing. The company is in talks with several other suppliers, they said.<\/p>\n
GAIL is looking to purchase a stake in a US LNG export terminal, coupled with a 1 million ton per year deal. About nine suppliers have expressed interest, a senior company official said. GAIL is also in talks with several other suppliers outside of the US, another official said.<\/p>\n
Spokespersons for Petronet, GAIL and IOC didn\u2019t immediately reply to messages seeking comment on contract negotiations.<\/p>\n
Even though there is little supply available before 2027 due to a lack of new projects, long-term contracts are still a way to avoid pitfalls in the spot market, Petronet\u2019s Singh said earlier this month.<\/p>\n
\u201cBusiness can\u2019t be managed with spot,\u201d Singh said. This year\u2019s import level \u201call depends on how the prices are hovering in international market. We are keeping fingers crossed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
India\u2019s liquefied natural gas buyers are seeking decades-long supply deals to protect them from price surges, a move that will support the government\u2019s plan to boost the fuel\u2019s use. Importers are accelerating efforts to lock in fuel, according to traders and executives. Buyers including Petronet LNG Ltd., GAIL India Ltd. and Indian Oil Corp. are in talks with suppliers in the US, Qatar and the UAE for deals that last for 20 years. The trend is a reversal for the nation, which hasn\u2019t signed a long-term deal since 2021, according to contract data from BloombergNEF. That should help reduce their […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-577340","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/577340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=577340"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/577340\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=577340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=577340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=577340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}