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Point of inflection-III: A historic moment for India as spot prices hit $3/mmbtu
Feb 07:
Spot LNG prices on Thursday -- propelled by the coronavirus and a massive supply overhang -- has hit a historic low of $3/mmbtu (JKM price)
8And what is pertinent from the Indian view point is that spot prices may not have seen the bottom yet
8The website considers this as a historic moment for a gas buyer such as India, and indeed a point of inflection that the country should take advantage of in every manner possible
8Such low prices will come as bad news for ONGC, whose breakeven price for its KG-DWN-98/2 field (which will hit first gas with an output of 0.6-0.7 mmscmd next month) is at or more than $6/mmbtu.
8Both RIL (which has a lower breakeven point than ONGC) and ONGC will have their volumes hitting Indian shores at a time when spot LNG prices are expected to be very low, making marketing domestic gas at a price higher than the break even level very difficult.
8At such prices, this website is now expecting defaults on offtake of long term cargoes, which may force a recalcitrant Qatar to come back to the negotiating table with PLL.
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8And what is pertinent from the Indian view point is that spot prices may not have seen the bottom yet
8The website considers this as a historic moment for a gas buyer such as India, and indeed a point of inflection that the country should take advantage of in every manner possible
8Such low prices will come as bad news for ONGC, whose breakeven price for its KG-DWN-98/2 field (which will hit first gas with an output of 0.6-0.7 mmscmd next month) is at or more than $6/mmbtu.
8Both RIL (which has a lower breakeven point than ONGC) and ONGC will have their volumes hitting Indian shores at a time when spot LNG prices are expected to be very low, making marketing domestic gas at a price higher than the break even level very difficult.
8At such prices, this website is now expecting defaults on offtake of long term cargoes, which may force a recalcitrant Qatar to come back to the negotiating table with PLL.
