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.