According to the latest report from Reuters, Gail (India) Ltd. views the falling price of spot LNG as the biggest risk to its business.
This month, Asian LNG spot prices fell to record lows of approximately US$3 per million Btu. This has made gas supplies exchanged via existing long-term deals unappealing for some price-sensitive customers in India.
Over the last 10 years, GAIL has over-committed itself to new LNG volumes from the US (5.8 million tpy) and Russia (2.5 million tpy). Indeed, the company rushed to secure new supply deals during a period of scarcity and double-digit spot prices, which has now left it in the difficult position of need re-sell the majority of its supplies brought in by long-term deals.
In his first public statement since recently taking over as Gail’s new Chairman, Manoj Jain told media that the widening gap between spot and long-term LNG prices was a cause of concern for the company and the biggest risk it was facing.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/25022020/gail-views-cheap-spot-lng-prices-as-threat-to-business/