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Market Chatter: Indian Power Producers Buy More Gas Domestically to Meet Cooling Needs

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Power producers in India have made a four-fold increase in their natural gas buying on a domestic exchange in the past couple of months as power demand surges for cooling during a scorching summer, Bloomberg reported on Friday.

The Indian Gas Exchange, the largest gas-trading platform in the country, sold 4.5 trillion British Thermal Units to power companies between April 1 and May 26, according to data it shared, resulting in a 350% year-on-year jump.

Indian power demand has risen to new highs both by day and night due to heatwaves this summer.

The country is facing a higher gas import bill to run gas-fired power stations to generate the current needed to run air conditioners around the clock.

Struggles to obtain more of the limited supply has led to power shortfalls of up to 5 gigawatts during peak evening hours, data from the Grid Controller of India showed, the article said.

Natural gas is used to generate about 2% of India's power, with the 20 gigawatts of gas-fired capacity mainly kept as a reserve for when demand rises in the evening. Shortages of gas have limited the usage of these plants this summer, the story said.

All of the volumes the exchange has sold this summer have been regasified liquefied natural gas, CEO Rajesh Kumar Mediratta said.

The average price paid was 1,769 rupees ($18.55) per million Btu over hte April to May period, about 64% more than one year prior, the article said, citing IGX data.

has contacted the Indian Gas Exchange seeking comment on the trend.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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