Shell India has brought in the fourth shipment of liquefied natural gas to its Hazira terminal last Saturday and has offered bulk of it to Gujarat State Petroleum Corporation and Essar group along with a few others.
The price at which LNG is offered is expected to set a new benchmark for the consumer industry here.
Shell is offering LNG at $9 per mmbtu, which is the prevailing rate in the Asia-Pacific market. Marc den Hartog, director, Shell India, confirmed to Business Standard, "We have received the cargo from Oman."
The 145,000 cubic metre shipment is enough to fill the single tank storage facility at its Hazira facility.
Asked about the price at which LNG is offered to its customers, Hartog said, "We have offered gas at the prevailing rate in the Asia-Pacific market."
He said even at this price, our rate is nearly 80 per cent cheaper than naphtha at its existing price. The spot market prices of LNG, largely driven by South Korean demand in the Asia-Pacific region, is floating around $9 per mmbtu.
Couple of months ago, the prices in the sport market for LNG had jumped to $10 per mmbtu due to non availability of floating cargo of LNG. Of late, the natural gas prices have set around the price of gas from Panna-Mukta-Tapti basin. PMT joint venture partners have set a price of gas for customers other than GAIL at $4.75 per mmbtu.
The Shell India offer price for its LNG indicates a future trend in gas prices in India. The higher prices above $8 per mmbtu looks inevitable in future considering the rising crude prices worldwide.
The availability of gas for domestic consumers in the fertiliser and power sectors is gradually turning into a serious issue compelling consumers to accept the fact that the prices may not come down to below $5 level.
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