Minister: revised Qatar LNG deal slashes price to below $5 per MMBtu

Costs of liquefied natural gas imports from Qatar have dropped below $5 per MMBtu due to the revised long-term deal Petronet LNG signed with RasGas, according to India’s minister for petroleum and natural gas, Dharmendra Pradhan.

India’s largest LNG importer, Petronet and RasGas of Qatar signed the deal in December to revise the 7.5 mtpa LNG import agreement the two companies had. Under the initial 25-year deal signed in 1999, Petronet agreed to pay about $12 per MMBtu.

“The current price applicable under the contract works out to less than $5MMBtu based on prevailing crude prices. This revision has led to making LNG cheaper for the end consumers,” minister Pradhan said on Tuesday in a written reply to a question in the Lok Sabha.

Petronet has avoided paying the $1.5 billion penalty for taking less LNG from RasGas than it contracted for 2015, but under the new agreement, it will have to take and pay for all of the volumes it has not taken last year during the remaining term of the long-term deal.

Petronet also agreed to buy additional 1 mtpa of LNG from RasGas for further sale to Indian Oil, Bharat Petroleum, GAIL and Gujarat State Petroleum.

LNG World News Staff