NEW DELHI/MILAN State-run Indian Oil Corp (IOC.NS) has awarded a tender to buy a liquefied natural gas (LNG) cargo for delivery in mid-July to trader Vitol, sources with knowledge of the deal said.
This is the second spot cargo procured directly by the country’s biggest refiner that has turned its focus to expanding its gas business. Previously it bought a cargo from Excelerate.
Trade sources said the delivered price was just above $7 per million British thermal units (mmBtu).
The 3.1 trillion British thermal units cargo will be delivered at Dahej Terminal in Gujarat.
Petronet LNG (PLNG.NS) operates the 10 million tonnes a year Dahej terminal and has a long-term deal with Qatar’s Rasgas to annually buy 7.5 million tonnes of the super cooled gas.
But demand for costly LNG procured under the long-term, oil-linked deal has dwindled as LNG is cheaper in Asian spot markets, trading at about $7.20/mmbtu.
India has for the first time used an option under the deal with Rasgas to take 10 percent less LNG.