Oman sells LNG to Shell despite GAIL offer

Vol 10, PW 6 (13 Jul 06) News in Brief

Ask any LNG importer how much it has paid for its cargo and youll be quietly told to mind your own business.

And so it is with Shells latest cargo of 145,000 cubic metres of LNG from Oman LNG that landed at the Hazira terminal on 4th July. Shell, it seems, first offered a price of $7.50 per mmbtu CIF, which Oman accepted.

But Shell later paid a higher price of $7.75. Why Rumour has it GAIL quietly approached Oman through the back door with a price of $8 for the same cargo.

Angry, Shell convinced Oman to stick to the deal but was forced to pay slightly more. Add 5.1% customs duty plus regassification, marketing charges and the final cost of Shells LNG is around $8.81 per mmbtu, less than the $9.07 it charges now.

GSPC wants the whole cargo and another two from Shell before the onset of winter in Europe and the US when prices shoot up. Shells next cargo from Oman is due in September.