India is negotiating the gas price and
has demanded it at $1.5 per Mmbtu.”.
The current price of USD 5.61 per Mmbtu is already among the lowest in Asia Pacific.
When gas prices trade around $4.00, the price per Mmbtu of gasoline is $28.00, compared to natural gas's $4.00 per Mmbtu.
The contango,
which was at about $1 per million British thermal units(Mmbtu) last month,
has since narrowed to about 50 cents or less, traders said.
India currently imports LNG at
global rates of around US$7.50 per million British thermal units(Mmbtu), while the government sets domestic gas
prices at US$3.06 per Mmbtu.
LNG spot prices have averaged
$10.03 per million British thermal units(Mmbtu) so far this July,
up from $5.59 per Mmbtu in the same month last year.
LNG spot prices LNG-AS have averaged
US$10.03 per million British thermal units(Mmbtu) so far this July,
up from US$5.59 per Mmbtu in the same month last year.
India's largest natural gas producer is demanding a floor or
minimum price of natural gas be fixed at $4.2 per Mmbtu for the business to make economic sense.
Novatek estimates the route saves 17 days of shipping from Yamal to China compared to a 36-day round trip through the Mediterranean and Suez Canal and
33 percent in costs per million British thermal unit(Mmbtu) shipped.
When Brent crude prices are at $70 a barrel, that translates to $10.37 per Mmbtu and at $80 a barrel,
it is $11.57 per Mmbtu compared to $11.40 per Mmbtu for October delivery on the spot market last week.
As per the New Domestic Gas Policy, the price of domestic natural gas is revised every six months and currently(Q1-FY19)
it is $3.06 Mmbtu, or 23.4 per cent higher than the price in the corresponding
period in the previous quarter.
The attractiveness of LNG relative to coal has also been boosted by a declining spot price for LNG in
Asia, which at the current $7.90 per million British thermal units(Mmbtu) is less than half the peak
of $20.50 reached in February 2014.