India’s LNG buyers stall deals as they await record supply wave

Core Insights - Major buyers in India's LNG market, including Gail India Ltd and Bharat Petroleum Corp, are negotiating for lower prices and more flexible long-term contracts, leading to stalled discussions with LNG producers for over a year [10] - India aims for natural gas to constitute 15% of its energy mix by 2030, but has faced challenges due to high LNG prices, with annual imports plateauing since 2020 [2][10] - Global LNG capacity is projected to increase by about 50% by the end of the decade, which could shift the dynamics of supply and pricing in favor of Indian buyers [10] Market Dynamics - The upcoming supply wave is expected to provide a "meaningful upside" for India's LNG imports, particularly in the city gas sector and non-fertilizer industrial demand as affordable LNG becomes available [5][10] - Indian buyers are currently well covered for the near term due to contracts signed for 2024 and 2025, reducing the urgency for additional long-term deals [6][10] - Price sensitivity among Indian buyers is high compared to developed Asian countries, leading to potential shifts to cheaper alternatives if LNG prices remain elevated [7][8][10] Pricing and Negotiations - Indian buyers are seeking long-term supply contracts linked to prices below 12% of the Brent crude benchmark, but suppliers have been hesitant to lower prices from the mid-12% range, resulting in stalled negotiations [9][10] - Recent price spikes due to cold weather in Europe and Northeast Asia have led some Indian buyers to halt purchases and cancel tenders, highlighting the impact of market volatility on buying behavior [8][10]