BPCL Issues Rare JKM-Linked Spot Tender for November LNG Cargo

Bharat Petroleum Corporation Ltd (BPCL) has issued a rare spot tender to purchase a liquefied natural gas cargo priced against the Japan Korea Marker for November delivery. This is a departure from India's typical flat pricing method, where buyers purchase cargoes at fixed prices. The tender seeks 3.1 to 3.8 trillion British thermal units of LNG with a 10% operational tolerance for delivery to Dahej.

The delivery windows offered are Nov. 21, Nov. 23-24, Nov. 26, or Nov. 29-30. Sellers must submit offers linked to December JKM prices, according to the tender document seen by Platts. This shift towards JKM-linked pricing is seen as a way to reduce the risk of buying spot cargoes at high prices and manage volatility.

Indian buyers typically purchase LNG at fixed prices, which can simplify resale in the downstream market but also carry additional premiums due to slippage risks tied to flat price movements. The use of JKM-linked pricing by BPCL suggests that Indian consumers are developing hedging capabilities.