Some Indian buyers cutting imports of costly spot LNG

India's largest gas importer Petronet LNG said on Saturday that some of its customers have postponed spot liquefied natural gas (LNG) imports due to high prices. they have provided long term supplies with more attractive term contracts. 

"Some people are cutting back on purchases and rescheduling cargoes, "AK Singh, chief executive of Petronet LNG said at a news conference.

High spot LNG prices are unsustainable and India "certainly" will sign long-term deals, he said.

Petronet has an agreement to purchase 7.5 million tons per year (mtpa) of LNG from Qatar and 1.44 million tons per year from the Exxon Gorgon project in Australia.

Asian spot LNG prices hover around $ 16 per million British thermal units, while supplies under long-term deals cost around $ 10 / mmBtu, he said.

He said the Indian energy sector cuts LNG intakes if prices rise by around $ 10 / mmBtu.

India aims to increase the share of natural gas in its energy mix to 15 per cent by 2030 from the current 6.2 per cent to reduce its carbon footprint. The country also plans to use hydrogen in some sectors.

Singh said hydrogen use will not impact LNG demand in the short term.

"Today, the cost of hydrogen production is very high and transportation and distribution are also a challenge. It is an emerging fuel while LNG is an established fuel," he said.

India allowed the use of supercooled gas in transportation to reduce the use of diesel.

Singh, whose company aims to create 1,000 LNG dispensing stations in 4-5 years, hoped India would be able to emulate the Chinese model, where its vast fleet of trucks is migrating to LNG from diesel.