Betul: India on Tuesday signed a USD 78 billion deal to extend LNG imports from Qatar by another 20 years till 2048 at rates lower than current prices.
Petronet LNG Ltd, India’s biggest liquefied natural gas import, in a statement, said it has signed a deal to extend the deal to buy 7.5 million tonnes a year of gas for producing electricity, making fertilizer and converting to CNG, with QatarEnergy on the sidelines of India Energy Week here.
The renewal is at a significantly lower price than the current deal. At current prices, India will save about USD 0.8 per million British thermal units at the renewed terms. This translates into savings of USD 6 billion over the contract period.
India, the world’s third-biggest energy consumer, sees natural gas as a transition fuel for migrating to net zero carbon emissions by 2070. As part of this, the government is targeting to raise the share of natural gas in the country’s energy mix to 15 per cent by 2030 from 6.3 per cent now.
The current deal is priced at 12.67 per cent of the prevailing Brent crude oil price plus a fixed component of USD 0.52 per million British thermal units.
Under the new contract, the slope would remain more or less the same but the fixed charge of USD 0.52 would be scrapped.
Also, India will save an additional USD 0.30 per mmBtu on shipping charges as Qatar has agreed to convert the deal to Delivered Ex Ship (DES) from Free on Board (FOB), thereby undertaking responsibility for shipping.