Surge in India demand sucks up LNG for Europe

London/New Delhi, July 4: India’s burgeoning demand for liquefied natural gas is dictating how many tankers make it to Europe, the world’s dumping ground for the fuel.

LNG imports to India jumped 43% in May from a year earlier, a contrast to western Europe where shipments have stagnated over the past three months. The world’s second-most populous nation is expected to double its LNG intake over the next four years, according to energy consultants Wood Mackenzie.

India overtook South Korea as the second-biggest buyer of spot and shortterm LNG cargoes after prices crashed about 65% in almost two years, spurring demand for the cleaner fuel from fertiliser producers to power plants. For a supplier, having a closer market helps. It takes three days to ship LNG to western India from Qatar, the biggest producer of the fuel, compared withtwoweekstogetittothe UK where prices are lower.

“India needs to be full before you start getting LNG imports in Europe going up,”NoelTomnay,vice-president of global gas and LNG research at Wood Mackenzie, said in an interview in London. “We haven’t seen a significant uptick in EuropeanLNGimportsyet.What we have seen is a significant uptick in India.”

The nation gets the fuel from Qatar at about $5 per mBtu,accordingtoPetronet LNG, India’s biggest importer. That compares with $4.37 on average at Britain’s National Balancing Point trading hub in the second quarter, data from the ICE FuturesEuropeexchangein London show.

“The NBP is below the western Indian market price, and that should gravitate the spot cargoes toward India,” Petronet CEO Prabhat Singh said in an interview in Delhi. Bloomberg