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Monday, November 24, 2014 11:50:32 AM
In Freight News 11/24/2014
Gail India Ltd is seeking to boost imports of spot liquefied natural gas next year as a decline in oil prices pushed down the cost of the super-chilled fuel. India’s largest natural gas distributor plans to buy about 30 spot LNG cargoes next year, including a term deal for 12 cargoes, compared with about 25 this year, Prabhat Singh, director for marketing at the state-run company, said in an interview at the CWC LNG Summit in Paris.
Lower crude prices combined with slumping demand for LNG from Japan and South Korea, Asia’s biggest consumers of the fuel, amid mild weather and high inventories has pushed prices to the lowest in more than 3-1/2 years. The drop may benefit India, the world’s fourth-biggest LNG importer, whose appetite for the fuel has been limited by its relatively high cost. “Prices have really come down, we are getting a good price on spot,” Singh said 19 November.. “We are trying to buy these spot cargoes and do a time swap,” he said, referring to a deal where the cargo is exchanged for a delivery in the future. Declining oil prices have a positive impact on LNG buyers as 90% of prices are linked to oil, Suk Joo Kim, the head of LNG procurement at Korea Gas Corp., the world’s biggest buyer of the super-chilled fuel, said at the conference.
Spot LNG cargoes for delivery in 4 to 8 weeks in northeast Asia “crashed” to $10.50 per million British thermal units in the week ended 17 November, according to data from New York-based Energy Intelligence Group’s World Gas Intelligence publication. Crude fell into a bear market, dropping 24% this year. Oil link Oil-linked LNG prices are still “slightly” more expensive than the US LNG that the New Delhi-based company plans to buy, Gail’s Singh said. “But they are coming to that level,” he said. “So it will help us.” Gail India has agreed to buy 3.5 million metric tons of LNG a year for two decades from Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana. It has also booked 2.3 million tons a year capacity in the Cove Point LNG liquefaction terminal in Maryland. The shipments are expected to start in 2017 or 2018. The company has a diversified portfolio of LNG contracts, including from Russia and Australia, he said. “Today the oil price is going down, it’s good for India,” Singh told delegates at Paris conference.
Source: Bloomberg
www.hellenicshippingnews.com/gail-to-buy-more-lng-in-2015-as-oil-pushes-price-down/
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