The latest tender is aimed at getting better prices for supplies
compared with those from the Middle East and to diversify sources of LPG,
according to the objectives listed in the document.
An Indian buyer of
liquefied petroleum gas is once again attempting to ease its dependence on
Middle East shipments after some supply shocks last year stemming from drone
attacks and even a trade war.
Bharat
Petroleum Corp. is seeking bids from global suppliers for a fifth of its
typical LPG needs in 2021, according to a tender seen by Bloomberg. Bidding is
still open to Middle East producers, which already provide BPCL with the
majority of its contracted needs. India’s second-biggest fuel retailer made an
attempt to broaden its sources of supply earlier this year but the tender
wasn’t awarded due to a lack of attractive offers, said traders.
The latest tender
is aimed at getting better prices for supplies compared with those from the
Middle East and to diversify sources of LPG,
according to the objectives listed in the document. India’s fuel retailers get
most of their LPG -- typically used for cooking -- from Saudi Arabia, Qatar,
the U.A.E. and Kuwait, leaving them exposed to price fluctuations and supply
shocks.
This was
highlighted by drone attacks on Saudi Arabian processing facilities and fields,
which happened just before India’s festival season, followed by curbed output
from the Middle East as OPEC tried to manage the virus-driven oil supply glut.
India also faced more competition for Persian Gulf LPG amid the trade war
between Washington and Beijing as China stopped importing from the U.S., its
main supplier.
“It’s a logical
move,” said Jeslyn Chua, an analyst at industry consultant FGE, adding that
almost all of India’s LPG imports in August and September were from the Middle
East. If tensions between the U.S. and China escalate into another trade war,
diversifying supply will be beneficial, she said.
No comments:
Post a Comment