India to renegotiate LNG rate with US, Russia

India Infoline News Service | Mumbai | October 08, 2017 11:39 IST

After getting Qatar and Australia to lower gas price, India is seeking to renegotiate rate of LNG it has contracted from the US and Russia to reflect current market realities, reported a national news agency quoting GAIL CMD, BC Tripathi.

After getting Qatar and Australia to lower gas price, India is seeking to renegotiate rate of LNG it has contracted from the US and Russia to reflect current market realities, reported a national news agency quoting GAIL CMD, BC Tripathi.

"We have successfully renegotiated, along with Petronet LNG Ltd, two long-term (LNG import) contracts. We are now working on third and fourth contract," he said at a FICCI (Federation of Indian Chambers of Commerce and Industry) conference.

In 2015, India renegotiated price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping save Rs 8,000 crore.

Tripathi said market structure has changed from a time when Indian firms struggled to get an appointment with LNG exporters to gas suppliers now running after the world's fastest growing energy market. This has primarily happened because availability has increased and prices have slumped in global energy markets.

GAIL wants to renegotiate the 2011 sales and purchase agreement (SPA) with Cheniere Energy for import of 3.5 million tonnes of LNG annually, with yearly fixed fees of USD 548 million and a term of 20 years. The US supplies are scheduled to begin from the next year. Also, GAIL wants Russia's Gazprom to delay and lower the price of gas it has purchased under a 20-year deal.

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