Indian energy companies pay multi-year highs for LNG

Indian energy companies are paying some of their highest prices in years for spot-market liquefied natural gas (LNG) as disruptions linked to the Iran war tighten global supplies.

State-run GAIL India recently paid more than $23 per million British thermal units (mmBtu) for an LNG cargo scheduled for delivery in September, according to people familiar with the transaction. Gujarat State Petroleum Corp. also paid in the mid-$23 per mmBtu range for a September cargo, the sources told Bloomberg.

The prices are among the most expensive LNG cargoes imported into India since 2022, according to the sources, who spoke on condition of anonymity because the deals are not public.

Indian state-backed energy companies have increasingly turned to the spot market as the government seeks to ensure gas supplies for fertiliser producers, which rely heavily on natural gas.

India has traditionally sourced much of its LNG through long-term contracts with Qatar, one of the world’s largest LNG exporters. However, Qatar’s major export terminal was damaged by Iranian attacks in March, while shipping through the Strait of Hormuz remains severely disrupted.

Indian buyers are also competing with European LNG purchasers, as gas prices in Europe have risen sharply amid concerns over global supplies.

Bharat Petroleum Corp. also agreed this week to purchase an LNG cargo on the spot market, according to the sources. The price of that deal could not be confirmed.

By Sabina Mammadli