![High prices may burn out India's growing LNG use](https://cdn.magzter.com/1547192204/1718650112/articles/FoJLCCFMWEW6Udr6ybfsys/HIGH-PRICES-MAY-BURN-OUT-INDIAS-GROWING-LNG-USE.jpg)
Prices of the Asian spot LNG benchmark went above the oil-indexed term contracts for the first time this week since December, with Platts' JKM (JapanKorea Marker) index surging more than 60 per cent since early March, driven by demand growth in Asia, said Greg Molnar, gas analyst at the International Energy Agency (IEA).
India's benchmark gas index GIXI, which belongs to the Indian Gas Exchange (IGX), was at $13.2 per million British thermal units (MMBtu) for LNG deliveries this month and $11.6 per MMBtu for July as on June 13.
Spot LNG prices in Northeast Asia were at $12.20 per MMBtu, according to US market intelligence agency Energy Intelligence for deliveries four to eight weeks ahead.
Term LNG from Qatar is available at $10-$11 per MMBtu, a Petronet official said. This is $2 per MMBtu cheaper than current spot levels.
India's gas-based power generators need the fuel at $5 per MMBtu to compete with coal-fired power, according to an NTPC official. They took five-six cargoes of spot LNG in May because of limited access to term supplies, prompting dependence on expensive spot fuels.
LNG imports in the first quarter of this year were 25 per cent higher than last year, and demand for gas in India is expected to grow 7 per cent in 2024 from a year earlier, according to the IEA.
The government will have to subsidise higher generation costs to avoid disruption in power supplies, with heatwaves prevailing in northern India.
Bu hikaye Business Standard dergisinin June 18, 2024 sayısından alınmıştır.
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Bu hikaye Business Standard dergisinin June 18, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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