India’s biggest gas marketing firm GAIL expects the share of spot and short-term liquefied natural gas (LNG) contracts in the nation’s gas consumption to rise after a slump in spot prices has made long-term deals less attractive.
“Presently one third of the market is (made up of) spot contracts and two thirds are long term. But we expect it to go more towards spot contracts,” GAIL Chairman Manoj Jain said at the India Energy Forum conference held by CERAWeek.
To cut its carbon emissions India aims to raise the share of natural gas in its energy mix to 15% by 2030 and companies are investing billions of dollars to build infrastructure including doubling pipeline capacity and setting up LNG import terminals.
“Long-terms contracts are going to be lesser and short and medium term contracts are going to be the order of the day,” Jain said, adding GAIL was looking at destination swaps and to convert long-term contracts to small and medium-term contracts.