India's Petronet bought a Nov. 17-22 DES Dahej/Kochi cargo through a spot tender at parity or a small discount to the average of November West India Marker, or WIM, industry sources told S&P Global Platts Sept. 22.
While there have been past reports of WIM-linked bilateral trades, this was the first WIM-linked spot LNG tender to be awarded by a state-owned importer, according to industry sources.
Petronet LNG confirmed on the WIM-linked tender but did not comment on price when contacted by Platts.
Monthly average for WIM November delivery cargoes is published from Sept. 16 to Oct. 15. The cumulative average of WIM November delivery cargoes till Sept. 21 is $4.68/MMBtu, Platts data showed. In comparison, the cumulative average for JKM November delivery cargoes is at $4.801/MMBtu on Sept. 21.
Adoption of WIM as a spot LNG price benchmark has not only been by Indian buyers, but also by other international market players, with nearly 20 WIM-linked bids and offers posted on the Platts Market on Close assessment process since April this year, Platts data showed.
The West India Marker was also used a basis for India's Oil and Natural Gas Corp.'s tender issued in November 2019 for supplying 750,000 cu m/day of domestic gas from the off-shore Krishna Godavari basin on the eastern coast of India.
ONGC had sold 100,000 cu m/day of gas from the KG Basin to HPCL at a premium of $1.01/MMBtu to the average of Platts West India Marker of three months preceding to delivery, and another 550,000 cum/day to GAIL at a premium of around 57 cents/MMBtu to the Platts West India Marker of three months preceding to delivery, as reported by Platts earlier.
Usage of spot LNG benchmarks to procure cargoes for the Indian market has become a wider trend, with other Indian LNG buyers also issuing tenders linking on a JKM basis and other international market participants posting bids, offers and trades on a JKM-basis for cargoes to be delivered to India.
During the Platts Market on Close assessment process on Sept. 17, Vitol sold a cargo to BP at the average of November JKM minus 25 cents/MMBtu for Nov. 1-3 delivery to India, Dubai or Kuwait.
GSPC has issued tenders seeking up to 10 cargoes on a JKM basis for cargoes to be delivered from October 2020 to June 2021. Reliance procured two cargoes on a JKM basis for October and November delivery. Arcelor Mittal Nippon Steel had issued a 30 TBtu/year 2021-2023 buy-tender on JKM-linked or fixed price pricing basis.
The adoption of key spot Asian LNG Benchmarks such as WIM and JKM by Indian buyers and international players maybe the beginning of the dynamic shift in LNG pricing which Petronet's CEO Prabhat Singh had hoped to witness, as per his interview with Platts in June this year.
Petronet was also looking to secure some additional long-term LNG volume linked to spot LNG price benchmarks, Singh had told Platts in the interview.
