LNG suppliers focus on spot deals in price jump, Gail India says

LNG suppliers focus on spot deals in price jump, Gail India says

Liquefied natural gas (LNG) suppliers are limiting the volume they deliver under long-term contracts in favor of higher-priced spot sales, according to GAIL India Ltd., a major LNG buyer.

Spot LNG prices surged to a seasonal record as buyers in Asia and Europe scramble to secure supplies to avoid a looming winter supply crunch. By contrast, long-term supply accords, typically linked to oil prices and with contracted delivery volumes, are now less than half the rate in the spot market.

“Suppliers are trying to limit the supply, the long-term quantities, to get a better price in the spot market and send it elsewhere,” E S Ranganathan, director for marketing at GAIL, said in an interview. “We had to buy spot cargoes at a higher price.”