 agreement with Qatar as part of its efforts to bolster the use of clean fuel within the country.){kind=link}
India Signs $78 Billion LNG Deal with Qatar to Ramp Up Clean Fuel Usage
India has entered into a $78-billion liquefied natural gas (LNG) agreement with Qatar as part of its efforts to bolster the use of clean fuel within the country.
The agreement entails Petronet LNG Ltd, India’s largest LNG importer, extending its current pact with QatarEnergy for an additional 20 years, until 2048. The existing sale and purchase agreement, signed in July 1999, is set to expire in 2028, with an annual supply of 7.5 million tonnes (mt) of LNG.
Under the terms of the new agreement, LNG supplies will be facilitated on a delivered (DES) basis starting from 2028 through 2048, as per Petronet’s announcement.
Signed during India Energy Week (IEW) in Betul, Goa, the deal offers rates lower than the prevailing prices. According to a PTI report, the supplies are expected to be provided at “significantly” reduced prices, resulting in an estimated savings of $6 billion over the contract period, with savings of approximately $0.8 per million British thermal unit (mBtu).
While Petronet has not disclosed the pricing details of the new agreement, the current gas purchase from Qatar is based on 12.67 percent of the prevailing Brent crude price and a fixed component of $0.52 per mBtu. The new deal eliminates the fixed component and additionally saves $0.30 per mBtu on shipping charges, as Qatar will undertake the shipping responsibility by converting the agreement from free on board (FOB) to DES.
With Brent crude priced at $80 per barrel, annual imports of 7.5 mt would amount to $3.9 billion, totaling $78 billion over a 20-year period. Upon regasification at Petronet’s Dahej Terminal, GAIL will procure 60 percent of the LNG, with Indian Oil Corporation and Bharat Petroleum Corporation Ltd securing 30 percent and 10 percent, respectively.
Petronet emphasized that the agreement reinforces India’s energy security and ensures continued supplies of regasified LNG to key sectors such as fertilizers, city gas distribution, refineries, petrochemicals, power, and other industries.
Akshay Kumar Singh, MD & CEO of Petronet LNG Ltd, commented, “The existing long-term agreement between Petronet LNG & QatarEnergy today accounts for around 35 per cent of India’s LNG imports and is of national importance. This agreement will provide energy security and ensure a stable and reliable supply of clean energy and help India in its stride towards greater economic development.”