LNG arbitrage: What is GAIL doing? – 22 Jun 2022

LNG arbitrage is mind boggling even

If you have a free cargo of LNG priced at Henry Hub (even through prices have gone up here) and you sell it at JKM prices, you can make a neat $116 million per vessel.

If you are taking it to Europe you are making even more.

We just keep wondering why so many months down the line, with a big fraction of the 5.8 MMTPA of US cargoes not coming into India and therefore uncommitted, GAIL is still not taking full advantage of these arbitration possibilities?

The argument that is usually forwarded is that all cargoes are tied up back to back, and there are no caroges to spare in which such arbitrages can be earned, but beyond a point, this argument does not hold much water