Indian energy importers have reduced the volume of liquefied natural gas they buy from abroad as prices trend higher. Instead, they are buying more oil products, Bloomberg reported.
Two energy majors—Gail India and Indian Oil Corp.—had recently canceled LNG purchase tenders because of the price, the publication noted in its report, citing unnamed sources. As a result, India’s total LNG imports for April are seen 5% lower than a year ago, at 1.9 million tons. This would be the lowest monthly LNG import volume since December 2023, per Kpler figures.
LNG prices have been on the rise recently because of production outages, one of them in Malaysia, which prompted delays in deliveries of the superchilled fuel to Asian customers. According to Bloomberg, there was also an outage at an Australian LNG project as well. Meanwhile, Europe’s largest LNG export facility, Equinor’s Hammerfest LNG, has been taken offline for annual maintenance that will last until July.
Indian importers, meanwhile, are looking for long-term supply deals for LNG. In February, Reuters reported that Indian Oil Corporation was in discussions to agree on a long-term supply deal with U.S. Cheniere Energy, in what could be one of many new LNG supply agreements between India and America.
The Indian state oil and gas and refining giant was negotiating a 15-year agreement to source LNG from Cheniere, the top U.S. exporter, with the potential deal reaching up to 2 million metric tons per year beginning in April 2027.
Also in February, Indian Oil Corp. sealed a 14-year LNG supply deal with Emirati Adnoc at an annual rate of 1.2 million tons. The deal was worth an estimate $7-$9 billion, according to Adnoc.
More recently, the Indian government said it is considering a removal of the import tax on U.S. liquefied natural gas to boost purchases as a means of avoiding U.S. tariffs by reducing its surplus with the world’s biggest market.
By Irina Slav for Oilprice.com
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