Torrent's tough conditions in 9-cargo tender
Torrent Power is expected to publish a nine-cargo LNG tender this month (June) under Phase-II of its plan to import 38 cargoes by 2021.
Torrent wants standard DES cargoes over 12 months from January to December 2018 - binding offers must be submitted for each month of the year. Whoever responds is free to quote less than nine cargoes but must quote a price linked to Brent, trading at $51.52/barrel on May 31.
As before, tough conditions will be attached to this tender. Torrent, it seems, continues to insist the price formula should include no 'constant' or fixed premium - considered a given with most LNG deals.
Any demand for a 'constant' will automatically render the offer invalid. Most LNG deals include a 'constant' in the range of $0.10/mmbtu to $1.00/mmbtu, or more.
"Everybody pays a constant," GAIL tells us. "Even we will pay a 'constant' for our Sabine Pass and Cove Point deals." Yet Torrent's demand will prevail, we hear, because it has a monopoly.
"Which other gas-based power company buys LNG directly?" asks a potential bidder. "Torrent is also operating in a buyers market and this is a huge advantage.
Torrent will dictate the terms!" Once Torrent selects its supplier it will work out a detailed ADP (Annual Delivery Plan) for 2018 with a cargo at Dahej every 41 days.