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The government has “proposed we should have more storage space for LNG so that when prices are lower we should store, and supply when there is crisis,” Vinod Kumar Mishra, finance director at Petronet LNG Ltd., said in an interview. “We have seen the crisis and it was difficult for the government also to ensure supply.”
While no storage targets have yet been discussed, Petronet is adding more tanks at its LNG import terminals to store the imported fuel and is working on a floating import plant in the eastern state of Odisha, Mishra said.
Last year’s crunch is also prompting Indian buyers to hunt for long-term supply deals, which ensures deliveries to customers at more stable prices, Mishra said. Some of these deals are likely to be sealed in 2023, he said.
Still, a recent drop in spot prices — down roughly 80% from August — is reviving demand in purchases for prompt delivery, said Mishra. Prices will need to fall to about $6 to $7 per million British thermal units to accelerate purchases, he added. The Asian spot benchmark closed above $12 on Friday, according to traders.
“India’s market is price-sensitive,” said Mishra. “It is not dependent on one kind of fuel. It can switch to any fuel that is cheaper.”
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