Spot LNG for India zooms to $12.5 /mmbtu  
1-Jan-1970

In step with surging crude oil prices, LNG/gas prices, too, have hit the roof in the international fuel market. Petronet LNG Ltd (PLL) on August 14 offered a spot LNG cargo from Qatar to GAIL (India) Ltd at an ex-shipment price of $10.85 per million metric british thermal unit (mmbtu).
This translates into a delivered price of over $12.5 per mmbtu, the highest price offered so far in the country. The chances of such high-priced LNG being sold in the domestic market are remote.

While chairman and managing director, GAIL, Proshanto Banerjee said his company was examining the proposal in terms of market acceptability of prices, managing director of PLL P Dasgupta said, ?Since GAIL has not responded so far, and considering that spot cargoes do not wait that long, the Qatari offer will be turned down.?

The petroleum ministry had on July 20 authorised PLL to import all spot cargoes of LNG and designated GAIL, IOC and BPCL as its three offtakers. PLL, however, has not been able to contract any spot LNG cargo since then.

?Untimely response from our offtakers has already led to cancellation of three spot LNG cargoes from Malaysia and Egypt. We received offers for two cargoes of 1.33 lakh cubic meters each from Malaysia and one from Egypt in August, before the offer from Qatar. Even though Malaysia and Egypt offered LNG at an ex-shipment price of $8 per mmbtu, there was a dull response from the offtakers,? Dasgupta said.

PLL has now written to the ministry to do away with the restriction of importing LNG only for GAIL, IOC and BPCL.

?We would, however, continue to offer every cargo to all three. Notwithstanding their confirmation or otherwise, PLL may still import spot cargo for marketing it to other customers,? Dasgupta said.



Source: The Financial Express, New Delhi, August 18, 2006
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