GAIL struggles to source spot LNG
GAIL is finding it difficult to buy a spot LNG cargo from the international market this month (November) because of disruptions at major liquefaction facilities in Indonesia, Yemen and Nigeria.
GAIL received no bids in its regular monthly tender for a spot LNG cargo worth roughly Rs300cr ($80m) by November 22. “Most of our regular LNG suppliers have declared ‘force majeure’ at their liquefaction facilities for one reason or another,” reports a senior GAIL source.
“For example, BP’s Tangguh LNG train 2 liquefaction facility in (the Papua province of) Indonesia has been shut for over two weeks since it caught fire on November 9.” Yemen LNG, Nigeria LNG, and Norway’s Statoil also did not offer cargoes.
GAIL issues a limited tender every month to LNG suppliers with whom it has signed Master Sales Purchase Agreements or MSPAs to source spot LNG. “Earlier we were buying spot cargoes at $10/mmbtu,” says GAIL.
“These days prices are over $14/mmbtu.”
