Spot LNG imports soar as prices drop

Vol 20, PW 14 (06 Apr 17) News in Brief

Sharply falling spot LNG prices are on their annual decline, dropping from $9.75/mmbtu for a BPCL cargo that arrived on February 2 to around $5/mmbtu now, as high winter demand dries up.

As a result imports are expected to pour in to Dahej this month (April) as companies snap up competitive rates. GAIL is bringing in three cargoes.

Two are 'prompt' or last-minute cargoes sourced through a tender which closed on March 29. One is a spot cargo sourced from Malaysia's Petronas.

Petronet-LNG will be bringing in a spot cargo from long-term supplier RasGas while GSPC is bringing in a SITME (Shell) cargo. "All are priced around $5.30/mmbtu," reports a LNG trader.

"Prices are falling simply because there is more supply than demand. This happened in 2016 too.

Expect prices to go below $5/mmbtu mid-2017." Ahmedabad-based Torrent Power is expecting its first short term cargo from Shell soon under a six-cargo deal awarded in January. All six are likely to arrive by December 2017.

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