New spot LNG prices too high for power firms

Mumbai : Companies say impact on cost of production makes for unviable economics A nearly 50 per cent increase over the past seven months in the prices of spot or regasified liquefied natural gas (R-LNG) has turned power generation companies away from the spot LNG market.

GAIL, Petronet LNG and Royal Dutch Shell say the companies have stopped buying gas from them. Gas is instead being sold to refiners, gas retailers, petrochemical producers and steel producers. Spot LNG prices have gone up from $10 per million British thermal unit (mBtu) at the beginning of this year to $15 mBtu. GAIL, which markets gas for Petronet LNG, has raised spot LNG prices twice since March this year.