Qatar slashes gas price for India, waives off Rs 12000 crore penalty

New Delhi(PTI): Qatar has agreed to lower the price of gas it sells to India on a long-term contract by about $6 billion (Rs ​39,858 crore) to reflect the slump in global energy rates and also waived the Rs 12,000-crore penalty for ‘short-lifting’ in 2015.

Oil minister Dharmendra Pradhan

Petronet LNG Ltd (PLL), India’s biggest gas importer, on Thursday signed a revised contract with RasGas of Qatar. The price as per the revised formula will come to $6-7 per million British thermal unit as against $12-13 per mmBtu currently, oil minister Dharmendra Pradhan said.

Pradhan said the reworked formula will apply to 7.5 million tonnes a year of LNG India buys from RasGas on a long-term contract ending in April 2028. The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that PLL buys an additional 1 million tonnes of LNG annually.

The trailing three-month average Brent price is about $44 a barrel while the average of Japan Crude Cocktail for the five-year period ended September 30 was $94. Pradhan said Qatar will also not seek Rs 12,000 crore from PLL for ‘under-lifting’ LNG from RasGas by 32%.

The value of the under-lifted cargoes in 2015 is Rs 12,000 crore and if the change-to-price formula was implemented, it would suggest a $2.5 billion (Rs ​16607.5 crore) buyer saving over three years.

Posted by on December 31, 2015. Filed under Nation. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.