By Nidhi Verma
NEW DELHI (Reuters) – Global energy major ExxonMobil is looking at signing more long-term gas sales deals with India as rising spot prices have added to the appeal of longer duration contracts.
“We’re certainly happy to work with our friends and partners in India to sign the kind of long-term contracts that allow a large part of the energy demand to be de risked from a price perspective,” said Monte Dobson, CEO, ExxonMobil Gas (India).
At present Exxon has a long-term contract to annually supply 1.5 million tonnes of liquefied natural gas to Indian firm Petronet LNG.
India is the world’s fourth biggest importer of gas. And the fuel’s demand in India is set to grow as Prime Minster Narendra Modi has set a target to raise the share of gas in the country’s energy mix to 15% by 2030 from the current 6.2%.
Companies are investing billions of dollars to build pipelines and gas import terminals to meet the rising demand in India.
Dobson said India needs to build a “stable base” of long-term contracts to de-risk its self from price volatility.
He said people who had secured more of their supply in the long term were “feeling a lot better”. “So that to me is the real solution,” Dobson said at World Energy Policy Summit.
The comments from Exxon come as many countries are battling soaring energy costs with Britain announcing a 54% jump in energy bills from April.
LNG prices have lurched from record lows of below $2 per mmBtu to all-time highs of $56 in the last 20 months, as markets struggle to keep pace with global economies recovering from COVID-19. Asian spot prices are at around $26.50 currently.
(Reporting by Nidhi Verma; editing by David Evans)
