Intro4u2u

Shell India, which sold spot LNG for more than $22/MMBtu to Indian customers when demand was

at its peak in summer, has found just one or two buyers since mid-October.

In fact, one of the buyers said that Shell’s storage facility was full with October cargo

and so it has had to keep one cargo on board a vessel for 30 to 45 days, hoping for a spike

in demand in the winter.

Gujarat Paguthan Energy Corporation, wholly owned by Hong Kong-based CLP group, has been the

only spot LNG buyer in the last three weeks.

With the price of naphtha having fallen below $8/MMBtu equivalent energy price, it is the

preferred fuel for industrial consumers.

Natural gas liquids are also available at a competitive price of around $10/MMBtu, making it

a popular choice for bulk consumers. However, even NGL sales have suffered because of low

naphtha prices and so ONGC, which supplies NGL in India, has gone in for exports. ONGC

exported 28,000 mt of NGL on November 17.

Some buyers such as Gujarat State Petronet Corporation, which supplies gas through its

subsidiary Gujarat State Petronet Limited to industrial and domestic consumers, and

automobile CNG dispensers across the state, has been selling at a price lower than its

purchase price.

India’s only spot LNG seller, Shell Hazira LNG, has been banking on buyers who do not have

the flexibility to use alternate fuel such as naphtha or NGL. These include gas distribution

companies such as GSPC, fertilizer companies such as Krishak Bharti Cooperatives or KRIBHCO

with gas-fired plants, or power companies such as National Thermal Power Corporation.

However, many of these buyers are already saddled with high price spot LNG bought during the

past couple of weeks. “We have stayed away from fresh purchase of spot LNG as we are

struggling to sell the gas bought at more than $18/MMBtu,” a GSPC official said.

Shell India, which operates a termin