{"id":9517,"date":"2024-01-19T12:19:02","date_gmt":"2024-01-19T12:19:02","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=9517"},"modified":"2024-01-19T12:19:02","modified_gmt":"2024-01-19T12:19:02","slug":"qatar-set-to-sign-cheaper-long-term-lng-deal-with-india","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/9517\/","title":{"rendered":"Qatar set to sign cheaper long-term LNG deal with India"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0Qatar Energy within weeks could sign a long-term deal to provide liquefied natural gas (LNG) to Indian buyers on cheaper and more flexible terms than existing contracts, trade sources said, as India seeks to meet a goal to increase the fuel’s use.<\/p>\n

The Indian companies and Qatar Energy have agreed on terms and a contract could be signed by the end of this month or early in February, one of the sources said, adding the contract offering destination-flexible cargoes and lower pricing, would run until at least 2050, possibly longer.<\/p>\n

It would extend contracts set to expire in 2028 for the supply of 8.5 million metric tons per year (tpy) LNG to Indian buyers and play a part in meeting Prime Minister Narendra Modi’s aim to raise the share of natural gas in the country’s energy mix to 15% by 2030 from 6.3% now.<\/p>\n

The Indian companies and Qatar Energy did not respond to requests for comment.<\/p>\n

Qatar, which aims to expand its liquefaction capacity to 126 million tpy by 2027 from 77 million, is keen to play a larger role in Asia and Europe as competition from U.S. supply increases.<\/p>\n

Last year, Qatar signed long-term deals with European majors Shell (SHEL.L), TotalEnergies (TTEF.PA) and ENI (ENI.MI).
\nQatari LNG is often priced in relation to oil, using a formula based on a slope, or percentage of crude.<\/p>\n

One of the sources said the deal is likely to be finalised at a price of around a 12% slope of Brent per million metric British thermal unit (mmBtu). A second source gave a range of 12-12.5% for supplies on a free-on-board basis for India.<\/p>\n

The second source said a deal could be signed during an energy conference in India from Feb. 6-9.<\/p>\n

None of the sources could be named because they were not authorised to speak publicly.<\/p>\n

Under an existing deal, India’s top gas importer Petronet LNG imports 7.5 million tpy of LNG from Qatar on a delivered basis with slope of 12.67% and a fixed charge of 52 cents.<\/p>\n

Additionally, companies including state-run Indian Oil Corp (IOC.NS), Bharat Petroleum (BPCL.NS) and GAIL (India) (GAIL.NS) – which hold stakes in Petronet – buy a combined 1 million tpy of LNG at the same price.<\/p>\n

The new deal will allow the Indian buyers to decide which terminal in India will receive cargoes, a third source said. Under existing deals, Qatar delivers LNG to western Gujarat state.<\/p>\n

The source added the freedom to decide on the arrival terminal could save Indian buyers pipeline transportation costs within the Indian grid.<\/p>\n

Petronet Chief Executive A. K. Singh last year said his company could get a price lower than the 12-13% slope of Brent offered by Qatar to China and Bangladesh.<\/p>\n

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