India's BPCL seeks JKM-linked spot Nov cargo in rare move

India's Bharat Petroleum Corporation Ltd. issued a spot tender to buy a November-delivery LNG cargo at a JKM-linked price in a rare move, a source familiar with the matter said Sept. 23.

The company sought 3.1-3.8 TBtu of LNG with 10% operational tolerance for delivery to Dahej, with delivery windows of Nov. 21, Nov. 23-24, Nov. 26, or Nov. 29-30, while sellers are required to submit offers at December JKM-linked prices, according to a tender document seen by Platts, part of S&P Global Energy. The tender closes Sept. 24 at 230pm IST, with same-day validity till 5.30 pm IST.

BPCL has yet to reply to Platts' query about the tender details.

Indian buyers typically buy spot cargoes at flat prices and it is rare for them to use JKM as a pricing benchmark, Asian LNG traders said. Buying spot cargoes at fixed prices makes it easier for buyers to sell the cargoes in the downstream market because they already know the purchase prices, but could come with additional premiums due to slippage risks from flat price movements.

Meanwhile, JKM-linked prices can mitigate the risk of buying spot cargoes at extremely high prices by averaging out price volatility. When buying at JKM-linked prices, however, hedging is preferable to further manage price volatility.

"It's good to know that Indian consumers are developing hedging capabilities," said a buyer in India.

LNG demand from India remains strong despite high prices following the closure of the Strait of Hormuz. India has bought at least seven cargoes so far in September, according to LNG traders based in Singapore and India. About 60% of India's LNG supplies were sourced from the Middle East before the US-Iran war, S&P Global Energy CERA data showed, prompting the country to look for alternative supplies.

Indian companies have been purchasing nearly 9.5-10.5 TBtu through fertilizer tenders every two weeks, according to Asian LNG traders. These tenders typically take place within 10 days of the scheduled start of RLNG supply, creating very prompt demand for cargoes.

While this is the company's first use of JKM in a spot tender, BPCL had previously issued a purchase tender seeking four to eight cargoes per year starting in 2026 for a 10-year term with JKM and Dated Brent as pricing basis for 2026-28 deliveries, Platts reported previously. The company was seeking four cargoes per year for 2026-29, and then eight cargoes per year for 2030-35.