India’s Petronet has no plans to invest in LNG developers
India’s Petronet LNG Ltd has no plans to invest in liquefied natural gas (LNG) developers as the market is flooded with cheaper fuel, its CFO said, indicating it could sideline plans to invest in the American project of Tellurian Inc.
Petronet, the country’s top gas importer, has until the end of December to consider investing $ 2.5 billion for 5 million tons per year (mtpa) of LNG in Tellurian’s Driftwood project through the end of 2020.
“Right now, we get LNG at disposable prices, so there is no need to invest … you should be more concerned about LNG than investment,” VK Mishra told an analyst conference on Thursday.
This is a non-binding memorandum of understanding and there is no commitment, Mishra said, adding that the company is in talks for a new long-term LNG contract linked to spot prices.
India has been looking for cheap gas for price-sensitive consumers, as Prime Minister Narendra Modi wants to increase the share of natural gas in the national energy mix to 15% by 2030 from the current 6.2% to reduce pollution.
Petronet has an agreement to purchase 7.5 mtpy of LNG from Qatar and 1.44 mtpy from Exxon Mobil Corp’s Gorgon project in Australia.
Spot prices for LNG are currently high due to increased demand during winters, he said, adding that prices would fall to $ 4-6 per million British thermal units (mmbtu) after January.
To meet India’s growing gas demand, Petronet is considering building a new LNG terminal on the country’s east coast and also plans to increase annual capacity at its Dahej terminal in western India to 19.5 million tonnes. from 17.5 million tons.
Petronet is also awaiting final approval from Sri Lankan authorities to build a floating LNG terminal in the island nation for around $ 300 million, Mishra said.