India capitalises on falling LNG prices: Rising demand

Falling prices for liquefied natural gas (LNG) are fuelling demand in India. Financially weak buyers waiting for low prices are flocking to the market.

Favourable LNG attracts buyers

Asian LNG has fallen below USD 13 per MMBtu (EUR 42.3/MWh (at an exchange rate of USD 1 = EUR 0.92 and a conversion factor of 1 MMBtu = 293.07 kWh)). This makes it more competitive with other energy sources. Indian companies are specifically looking for favourable spot market offers.

Indian Oil Corp. and Bharat Petroleum Corp. are considering buying several supplies for the coming months. Hindustan Petroleum Corp. has already purchased a cargo for around USD 12.80 per MMBtu.

Global developments push prices down

Global LNG prices have fallen over the past month. In Asia, inventories remain high, while demand is weakening towards the end of winter. Prices are falling, albeit more slowly than in Europe.

Consequences for India

India could benefit from the low prices. Cheap LNG reduces dependence on more expensive fuels and helps industry and households. If prices remain low, Indian demand could continue to rise.