India asks Qatar to lower LNG price to reflect market realities
India on Monday pressed its largest LNG supplier Qatar to lower price of gas supplied under long-term contract to reflect falling rates of the spot or current market, Oil Minister Dharmendra Pradhan said. Qatar supplies 8.5 million tonnes of liquefied natural annually to India at a price linked Brent crude oil. Landed price comes to USD 9-10 per million British thermal unit, while the same gas is available in spot market at half the rate.
After talks with visiting Qatari Energy Minister Saad Sherida Al-Kaabi, Pradhan said, "LNG contracts should reflect current market reality".
"All energy producers have to revisit this old practice (of pricing LNG linked to oil) and come to new methodology reflecting demand-supply," he said.
India has in the past used its status as Asia's third-largest LNG buyer to renegotiate deals with Qatar, Australia, and Russia. In 2015, it renegotiated the price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping in saving Rs 8,000 crore.
In 2017, it got ExxonMobil Corp to lower the price of Gorgon LNG and a year later convinced Gazprom to lower rates also.
