India’s state gas company GAIL (India) Limited has purchased a cargo of Liquefied Natural Gas (LNG) from Oman. According to trade sources, this purchase has been made to meet the increasing demand for natural gas in the country. Sources said that the company has purchased this cargo through negotiations with a European trader. This cargo is going to reach India next week. According to two sources, the deal price has been fixed at around $17 to $20 per million British thermal units (mmBtu), which is in line with current market prices.
Cargo will reach India around March 15
According to Kpler data, this LNG cargo has been loaded onto a ship named Orion Hugo. This ship can reach India around March 15. This ship has been chartered by Shell plc. However, no official response has come yet from GAIL regarding this purchase. Experts say that uncertainty regarding the supply of gas has increased in recent times, due to which India is needing to buy additional LNG from the spot market.
India is heavily dependent on imports
The total consumption of natural gas in India is about 195 million standard cubic meters per day (mmscmd), of which about half the requirement is met through imports. Earlier, India was getting about 60 mmscmd gas from the Middle East. But due to recent geopolitical tensions, the supply of the region has been affected. Especially after the obstruction in the Strait of Hormuz and declaration of force majeure by Qatar, the situation has become more complicated.
Government started steps to balance supply
After this interruption in gas supply, the Indian government and gas companies are taking steps to balance the supply. Under this, gas is being removed from non-priority areas and given to essential sectors, so that important needs like electricity, fertilizer and gas supply of cities can be given priority. Experts believe that if the supply situation in the international market does not normalize, India may have to buy more LNG cargo from the spot market in the coming times.