Oil & Gas Sector Update - Spot LNG Rebounds As Asia, Europe Compete For Supplies: ICICI Securities

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ICICI Securities Report

Japan Korea Marker spot liquefied natural gas prices, which fell from record highs in January 2021 to $5.6/metric million British thermal unit in March 2021, have rebounded to $8.85/mmbtu.

This rebound has been driven by:

1. Strong demand from China, Japan and Korea as they seek to replenish inventory that fell during the extreme winter in Q1 CY21.

2. European gas inventories at three year low.

3. Outages at LNG export plants in Russia and Australia.

GAIL India Ltd. is best placed to gain from the oil and spot LNG surge, which augurs well for its FY22E gas marketing Ebitda outlook.

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