Reliance buys two LNG cargoes from GSPC
Reliance has re-entered the LNG market after an absence of two years by buying two spot LNG cargoes from GSPC.
And that too, at attractive prices. "GSPC and Reliance closed the deals while the cargoes were on the high seas," says a source.
On March 1 (2024), a 166,999-cubic metre Nigerian LNG cargo landed at Dahej aboard LNG tanker Kool Baltic for Reliance, sourced by GSPC through SITME for $9.25/mmbtu. On January 28 (2024), a 134,892-cubic metre Adnoc cargo arrived at Dahej aboard tanker Al Hamra for Reliance, sourced by GSPC through SITME for $12.15/mmbtu.
"Both Reliance and GSPC are tough negotiators," we hear. "But Reliance must have paid a $0.15 or $0.20/mmbtu premium to GSPC to get the two cargoes."
Reliance's decision to buy two cargoes comes as spot LNG prices plunge below the price of domestic gas it produces from its east coast fields. From October 1 (2023) to March 31 (2024), the gas price from deep sea and HP/HT areas was cut to $9.96/mmbtu from a high of $12.12/mmbtu price from April 1 (2023) to September 30 (2023).
Reliance last sourced an LNG cargo from QatarEnergy through SITME on August 15 (2021) for $11.11/mmbtu. "With rising LNG prices, Reliance stopped bringing in cargoes (for its Jamnagar refinery)," we hear.
LNG prices climbed from $6/mmbtu in January 2021 to more than $30/mmbtu in October 2021, $35/mmbtu in January 2022 and $50/mmbtu in October 2022. Steel maker AMNS paid a record $52.71/mmbtu on October 13 (2022) for a 166,660-cubic metre SITME cargo sourced from Montoir-de-Bretagne in France.
Unwilling to pay so much, Reliance instead began using gas from its R-Cluster and Satellite Cluster fields at KG-DWN-98/3 and the Sohagpur East and West CBM blocks in Madhya Pradesh. Reliance also uses synthetic gas from eight gasifiers at Jamnagar, each producing 2.35m cm/d since 2020.
Separately, the JKM for May 2024 deliveries shows an upward trend at $9.39/mmbtu on March 18 (2024) compared to $9.07/mmbtu on March 5 (2024). For June deliveries, the JKM stands at $9.42/mmbtu compared to $9.47/mmbtu on March 5 (2024).
For July, the JKM rises to $9.64/mmbtu.