India’s LNG Importers Turn To Expensive Foreign Gas To Address Power Crisis: Report
These purchases are not usual for India's cost-sensitive power generators, which tend to avoid buying LNG at such high rates.
The LNG was used to produce about 4% of the nation's electricity in 2020, versus 71% for coal, according to Bloomberg report.
New Delhi: Due to sweltering heat and ongoing power crisis in the country, India's liquefied natural gas importers are being forced to top up with expensive shipments, a report by Bloomberg stated on Thursday. Torrent Power Limited and GAIL India Limited have purchased LNG for May with the fuel to be used for power plants boost generation, traders with knowledge of the matter told Bloomberg.
Further, the report suggested that the utilities paid are just triple the normal spot rate for this time of year as Russia's invasion of Ukraine exacerbates a global supply crunch.
More significantly, these purchases are not usual for India's cost-sensitive power generators, which tend to avoid buying LNG at such high rates from outside.
While natural gas makes up just a small portion of India's power mix, the scarcity of coal and the extreme heatwave has triggered the scheduled blackouts, threatening to upend the economy.
The LNG was used to produce about 4% of the nation's electricity in 2020, versus 71% for coal, according to a Bloomberg report.
To address the power crisis, GAIL is seeking at least one more shipment for late-May, the traders said and added that several other Indian firms are inquiring about cargoes in the bilateral market.
And it is not just India, the blistering heatwave has also prompted neighboring Pakistan to purchase the nation's most expensive shipment of the fuel to avoid blackouts during the Eid holiday this week. Pakistan has also recently released a tender seeking to purchase another two cargoes for June.
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