Spanish LNG threat to RasGas dominance in India

Vol 13, PW 20 (25 Mar 10) People & Policy

RasGas had better watch out! There’s a new kid on the block and he’s hungry to displace the Qatari-ExxonMobil joint venture as India’s supplier of choice for spot and long term LNG.

In the early hours of (Thursday) March 25, thousands of miles from GAIL’s successful 6th Asia Gas Partnership Summit in Delhi, LNG carrier Catalunya Spirit set sail to India from Trinidad & Tobago in the Caribbean Sea, carrying a 138,000 cubic metre cargo for GSPC. Scheduled to arrive at the Petronet-LNG import terminal at Dahej on April 21, Catalunya Spirit is the first of nine spot cargoes contracted to GSPC by Stream, a 50-50 joint venture between Spain’s Repsol and Gas Natural.

Little is known about how much GSPC paid - as with all spot contracts the price is a closely guarded secret. Is it benchmarked against Henry Hub; or the NBP (Natural Balancing Point) benchmark in the UK; or full-bodied â€کRioja’ red wine! Only GSPC or Stream would know the answer to that question.

What is clear is that last November GSPC signed a contract with the Spanish offtaker for a “regular commitmentâ€‌ to supply nine cargoes from April to December this year, catapulting the company into the prized position of India’s second major supplier after RasGas, leaving Shell behind, as cargoes to the Hazira terminal jointly operated with Total trickle to a halt. Analysts welcome the Spanish LNG charm offensive.

“Competition is good,â€‌ says one. “It’s risky to depend on one supplier only.

India needs to diversify its portfolio of LNG suppliers. What happens if there is a Force Majeure situation India imports more than 90% of its LNG from just one company - RasGas.