Good Time for India to Get Into Long-Term LNG Deals

Current environment of low LNG prices has provided a good opportunity for India to tie up long-term contracts, Fatih Birol, Executive Director of the International Energy Agency (IEA) said in New Delhi Friday.

Birol, who was in the city to release the India Energy Outlook 2015, said there is expected to be a further downward pressure on LNG prices as new suppliers come into the market, Business Line reported.

“We think a new and very important gas market is developing in Asia with a demand of about 400 billion cubic metre and I can tell you that US, Russia, Australia and even some African countries are eyeing this market,” said Birol. “We think it is important to look at the window of opportunity here. LNG prices are on the low side and a number of projects coming on stream in the next few years, this is right time to look at tying up contracts.”

However, he stated that despite strong outlook for LNG demand in Asia, competition from coal still remains, the newspaper reported.

The IEA predicts that India’s energy demand will be close to that of the US by 2040 but per capita demand will still be 40 per cent below the world average.