India may sign long-term LNG import deal with Qatar for 20 years
India is planning to sign a multi-billion dollar deal to extend LNG imports from Qatar for almost 20 years till 2048 at the lower rates from current prices. Petronet LNG Ltd will sign a deal with Qatar Energy to extend the import of 7.5 MT.
Currently, Petronet imports 8.5 MT per year of LNG from Qatar under two contracts. The first 25-year deal is to expire in 2028 and will be extended for more than 20 years and the second deal for 1 MT per year commenced in 2015 will be negotiated separately. As per the sources, the current deal is priced at 12.67 percent of prevailing Brent crude oil prices plus USD 0.5 per million British thermal units.
Additionally, it would be a great deal for India as it will save USD 0.30 per mm Btu more than it incurs on shipping as Qatar would be bearing the deal to Delivered Ex-ship from Free on Board via taking the responsibility of shipping.
Read Also : IndusInd Bank Q1 FY25 results, net profit at 2% YoYPetronet LNG Limited, India's flagship LNG terminal-owning company, has successfully concluded and executed a LNG Sale & Purchase Agreement (LNG SPA) for the purchase of around 7.5 MMTPA LNG with QatarEnergy on a long-term basis today. This is pursuant to the extension of an existing LNG SPA for LNG supply of around 7.5 MMTPA LNG Sale & Purchase Agreement on FOB basis, signed on 31st July 1999 for supplies till 2028. Under the new agreement, LNG supplies will be made on a delivered (DES) basis commencing from 2028 till 2048.
Similar to the earlier agreement of 1999, the LNG volumes under the new SPA shall also be offtaken by GAIL (India) Limited (60%), Indian Oil Corporation Limited (30%) and Bharat Petroleum Corporation Limited (10%) after regasification primarily from Dahej Terminal of PLL on substantially back to back basis.
Read Also : RBI issues guidelines on higher liquidity coverage ratio for retail depositsThe other corresponding partners are firm promoters like Indian Oil Corporation, BPCL, and GAIL India Ltd would buy a combined worth of 1 million tonnes per year. The government is also targeting to raise the share of natural gas in the country’s energy mix to 15 percent by 2030 from 6.3 percent now. Under existing deals, Qatar delivers LNG at Dahej in Gujarat.
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