Indian LNG Consumers Embrace USA Benchmark to Stability Volatility

Last updated: 2025/05/08 at 9:24 PM

Editorial Team 1 month ago

Indian liquefied pure gasoline importers have signed a flurry of long-term buy agreements linked to the US worth benchmark, the newest effort by the nation’s consumers to guard themselves from unstable markets.

State-owned firms have signed at the least 4 contracts since December, totaling practically 11 million tons per 12 months, priced to the Henry Hub index, based on the executives conversant in the offers. Till now, most of India’s long-term contracts have been linked to crude oil, the standard technique to worth LNG offers.

Pricing the gas to the Henry Hub index doesn’t essentially imply that the gas will come from the US, slightly it’s a transfer to hedge danger.

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India’s shoppers — from energy crops to petrochemical services — are extremely price-sensitive as gasoline competes head-to-head with cheaper and dirtier options. Corporations that relied on the spot market or oil-linked contracts have periodically been pressured to chop again purchases as a result of worth spikes.

US gasoline futures have additionally been comparatively much less unstable and extra liquid than the Asian spot benchmark, the Japan-Korea Marker.

“The final ten 12 months common reveals that there have been intervals throughout winter months JKM benchmark surged past creativeness, whereas Henry Hub costs noticed proportionally smaller progress,” Bharat Petroelum Corp Ltd’s Director Finance V.R.Okay. Gupta stated.

BPCL in February signed a cope with ADNOC Buying and selling for two.5 million tons of LNG for 5 years. The Mumbai-based refiner will consider the efficiency of the deal and should signal extra such contracts, Gupta stated.

Indian Oil Corp. final week signed a cope with Trafigura for two.5 million tons, or 27 cargoes, unfold over 5 years, with provides beginning the center of this 12 months.

The latest offers have been signed at a 115% hyperlink to Henry Hub plus $5 to $6 per million British thermal models. The provision is for supply on to India and contains the price of delivery.

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