NEW DELHI: With the US pushing for significantly increasing its oil and gas supplies to India, experts have questioned the cost viability of the proposal.
They said the US, currently India’s fifth-largest crude oil supplier, may become a costly import option for Indian refiners due to higher landing costs as against traditional suppliers in Central Asia or Russia, which offer significant discounts.
However, they still see possibilities of increasing in imports from the North American country. Gaurav Moda, partner and Leader of the Energy Sector, EY-Pantheon, says that increasing crude imports from the USA is possible, as it was done earlier with aligned interests. Accordign to him, LNG can be sourced more quickly, but sourcing WTI crude requires more effort.
“For crude, supply timeline and cost considerations like 6-7 days from Middle-East against 40-45 days from Texas. Alignment of US crude specs with Indian refineries may have to be evaluated. Irrespective, quick volumes growth is possible with aligned interests as we have seen in recent past with respect to supplies from other countries. Increasing gas volumes could be quicker, as Henry Hub prices are discounted against other sources, while discounting WTI crude on realtime basis could require effort,” said Moda.