"LNG Price Surge Pushing Buyers To Look At Long-Term Contracts": Petronet

Petronet says long-term LNG is currently costing it $11-$12/million British thermal units compared to spot prices of around $40/mmBtu.

Surging liquefied natural gas (LNG) prices are pushing buyers to look at securing long-term contracts possibly with an option for a floor and ceiling price to hedge against extreme volatility, the CEO of India's top gas importer said on Friday.

"Such a volatility was never seen in the history of LNG markets. We have seen the lowest and the highest prices in the last one year," A.K Singh, chief executive of Petronet LNG, told the India Energy Forum by CERAWeek, an industry event.

Asia spot LNG prices dropped to a record low of below $2 per million British thermal units (mmBtu) in May last year when coronavirus-induced lockdowns depressed gas demand. Earlier this month, they rocketed to a record high above $56 per mmBtu

Prices have pulled back to around $30 per mmBtu since, but remain nearly 500 per cent up from last year. "Every dark cloud has a silver lining and this (high price) situation is pushing people to have more long-term contracts than normally and that could be the best thing for the gas economy across the world," he said.