Darshan Hiranandani mints money trading LNG

Vol 22, PW 3 (15 Nov 18) Midstream & Downstream

Once ridiculed for his unorthodox plan to set up a tolling LNG import facility at Jaigarh, Darshan Hiranandani is having the last laugh.

Well-placed sources tell us the H-Energy boss Hiranandani is "minting money" with his shrewd LNG trading skills. Dubai-based LNG trading company H-Energy Mideast DMCC (HEMD) is believed to be making enviable profits after it signed a three-year LNG supply deal with Malaysia's Petronas on January 24, 2018, for which deliveries began from May 2018.

"The total deal with Petronas is for 1.5m tonnes LNG spread out in 500,000 t/y tranches for three years till 2021," reveals a senior LNG industry source. "It is linked to 10.6% of the prevailing Brent (benchmark) price." This is the first 'term' LNG contract Petronas has signed with any Indian company though it has supplied many spot cargoes in the past.

Hiranandani signed the SPA with Petronas LNG managing director Eshar Yazid Jaafar in Kuala Lumpur. "Darshan's timing proved so good that what he purchased for 10.60% Brent he sells at 12%, 13% or 14% Brent," adds another senior LNG industry source.

Hiranandani himself is actively involved in day to day operations. "Darshan's LNG trading story is inspiring," we hear.

"It takes guts to take those kinds of risks." In October, HEMD signed another deal for 17 cargoes for 2019-22 delivery from an unknown supplier.