KG D-6’s gas has affected the LNG’s spot market. Power and Fertilizer companies have diverted their attention towards KG D-6 for the gas supply. In last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has been arrived.
The spot market of Liquid Natural Gas (LNG) is shrinking. This could well be estimated from the fact that the business has faced beating in last one month at the Hazira LNG terminal of Shell and Dahej terminal of Petronet LNG. KG D-6’s gas has affected the LNG’s spot market to a great extent during the recent times. Reliance Industries’ (RIL) prolific KG D-6 is now producing 60 million standard cubic metre of natural gas every day (mmscmd) and has almost replaced the spot LNG demand in the country.
Most of the power and fertilizer companies have diverted their attention from the spot market of LNG to KG D-6. Supply of KG D-6 gas has largely replaced the demand of spot LNG. This is evident from the fact that before the allocation of KG D-6 gas, RIL itself was consuming almost 4 cargoes of LNG every month. According to the government sources, in last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has come.
Chief Executive Officer and Managing Director of Petronet Mr P Dasgupta said, “Today no one is making any LNG’s spot deal, the last LNG spot cargo was arrived in November 2009. The demand can only be there with advent of new energy and fertlizer companies. The present demand for the gas is being met by KG D-6 gas and the long term gas demand is being met by import of LNG by Petronet.”
According to the sources the future price of LNG is close to $8.2 per mmbtu, while KG D-6 gas is available at $4.20 per mmbtu. Till December last year even RIL was buying spot LNG from Hazira, every month for its Jamnagar Refinery. After it was allotted KG D-6 gas, no one is buying at spot LNG from Hazira. One of the officers of Shell India, also confirmed low spot LNG business, however, he refused to shares the figures.
Prior to KG D-6 gas supply, total gas supply in the country was staggering at around 110 mmscmd, including the long-term LNG sourced by PLL and Shell, as against the demand of about 175 mmscmd. Remaining gas demand was met through spot LNG. With the production of 60 mmscmd gas from KG D-6 field, the present demand of gas in the country is satisfied. However, the gas demand in the future is likely to rise again in the coming years as the domestic supply is unexpected to match the pace of growing energy demand of the nation.
Source:http://oilandgasindia.blogspot.com/2010/02/kg-d-6-gas-fast-replacing-spot-lng.html
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