Page 14 - GLNG Week 19 2022

GLNG ASIA GLNG

India laps up discounted

Russian LNG

TRADING INDIAN companies are taking advantage of to a continuing heat wave in the subcontinent
cheap prices on the spot market for Russian LNG that is causing power cuts, the country is topping
while most other importers are avoiding cargoes up gas supplies by purchasing spot cargoes that
of Russian origin owing to the war in Ukraine. are selling at lower prices than cargoes of differ-
Sanctions have yet to be placed on Russian gas ent origins. India is seeing its electricity demand
by the European Union and other countries soar as temperatures exceed averages for this
but numerous financial sanctions have been time of year. The country is also taking advantage
imposed on Russia since its military invasion of of discounts on Russian oil.
Ukraine on February 24. The situation is exacerbated by the fact that
he EU is currently considering a schedule for electricity demand has created a domestic coal
when it will take action against Russian hydro- shortage, forcing some Indian power generators
carbons and it is anticipated that such action to buy gas cargoes. India normally produces
could push international energy prices higher. about 70% of its electricity from coal, while gas
Halting purchases of Russian hydrocarbons is accounts for around 6%.
viewed by the West as the most effective way to Gujarat State Petroleum and GAIL (India) are
put pressure on the Russian economy but comes two Indian firms that have made spot purchases
with considerable challenges. and others are reported to be making inquiries
Many countries have already taken action to about purchasing Russian spot LNG. India is
stop imports of Russian oil, coal and gas, hence expected to continue making purchases of Rus-
Russia’s discounted prices. The war and the stop- sian gas as long as prices remain reduced.
page of purchases of Russian hydrocarbons by Russia continues to deliver LNG cargoes to
Ukraine’s allies, has forced prices to surge in an buyers under contract conditions, but some
already tight market. regular customers of Russian spot LNG, such as
About three-quarters of India’s LNG deliver- Japan and South Korea, have stopped making
ies arrive under long-term contracts, but owing those purchases.™

P14 www. NEWSBASE .com Week 19 13•May•2022