Petronet seeks lower price for renewing Qatar deal
India’s top gas importer Petronet LNG Ltd wants Qatar Gas to lower prices for it to renew a long-term liquefied natural gas (LNG) import deal beyond 2028, its CEO Akshay KumarSingh said on Thursday. The company in the immediate term is looking to tie up 0.75 to 1 million tonnes of LNG to meet the burgeoning energy demand in the country, particularly of the city gas sector. Petronet also buys an additional 1 million tonnes of LNG at a slight variation to this price. The 8.5 million tonnes a year contract ends in 2028. “They (Qatar Gas) have contracted to our neighbouring countries including Bangladesh, China and Pakistan at a lower slope (than 12.67 per cent). Our expectation is to have the long-term deal renewed at those levels,” he said. “We are very seriously engaged with them and are negotiating for a better price.” Qatar’s recent contracts with China, Bangladesh and Pakistan are linked to a slope of about 10.2 per cent of the Brent crude price on a delivered ex-ship basis. He indicated that Petronet may seek higher volume than the current 8.5 million tonnes. “Our first priority is to secure the extension of 8.5 million tonnes a year deal. Beyond that additional volumes can be sought based on a demand assessment. We have not frozen additional requirements,” he said. Petronet LNG Ltd’s 7.5 million tonnes a year liquefied natural gas (LNG) import deal with Qatar Gas is ending in 2028. Renewal, if any, has to be confirmed five years ahead of that (i.e. end of 2023). However, the company wants 0.75 to 1 million tonnes of LNG supplies in the next one year to meet the rising gas demand in the country, he said. Gas demand in India is surging as the government pushes for raising the share of the clean fuel in the energy basket to 15 per cent by 2030 from the current 6.7 per cent. A massive expansion of city gas that entails the supply of CNG to automobiles and piped natural gas to households, is creating additional demand.
IGX gets regulator’s approval for trading of domestic natural gas
The approval is in line with the petroleum ministry’s notification dated 19 August 2021 where domestic gas producers were authorised to sell up to 500 million standard cubic meters or 10 per cent of annual production from contract area, whichever is higher, annually through gas exchanges. Indian Gas Exchange (IGX), announced it has received approval from Petroleum and Natural Gas Regulatory Board (PNGRB) to trade domestic gas on its platform and it will launch gas trading on 16 May 2022. “This is like the beginning of new era in gas markets. Exchange will enable trading of marketing freedom ceiling price gas (ONGC & Reliance KG D6) and marketing and pricing freedom gas namely CBM, DSF etc in more flexible spot basis up to 6 months,” Rajesh K Mediratta, Managing Director & CEO of IGX, said. With this approval, upstream gas production and Marketing & Pricing Freedom gas can now be effectively managed through flexible contracts at IGX, the exchange, an arm of Indian Energy Exchange (IEX), said in a statement. “In addition to this, producers will also have immediate sales opportunity which will eventually result in maximisation of domestic gas production and increased liquidity on the platform,” it added. Small buyers who currently do not have access to domestic gas either due to their size or allocation priority can now come to the exchange and procure domestic gas at competitive prices and ultimately help build a gas ecosystem. IGX currently facilitates delivery-based trades in six contracts such as Day-Ahead, Daily, Weekday, Weekly, Fortnightly and Monthly at five different designated physical hubs – Dahej, Hazira, Dabhol, Jaigarh and KG Basin.