Report: Petronet LNG looking to alter Gorgon supply deal

Petronet LNG, India’s largest importer of liquefied natural gas has reportedly started talks with ExxonMobil to alter the pricing terms of the 1.4 mtpa supply deal from the Chevron-led Gorgon LNG project in Australia. 

According to a report by The Financial Express, Petronet LNG is looking to rework the deal due to low spot prices, compared to which, the long-term supplies are expensive.

Currently, the spot prices are in the area of US$4.7 per million British thermal units while supplies from the Gorgon LNG project would stand at $6.5/mBtu not taking into consideration the regasification charges, according to the report.

Under the contract Petronet has with ExxonMobil, a holder of a 25 percent stake in the Gorgon LNG project, Indian importer would be supplied 1.44 mtpa of LNG for a 20-year period.

However, a director on Petronet’s board said the comparison of spot prices to long-term supply is unfair due to different slopes in pricing, the report said.

At the end of last year, Petronet renegotiated its 7.5 mtpa deal with Qatar’s RasGas cutting the price from about $13/mBtu to around $6 to 7/mBtu. In addition to the price reduction, Petronet agreed to purchase additional 1 mtpa of LNG.

LNG World News Staff