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Home > News > India News > Article > India set to sign USD 78 billion deal with Qatar extending LNG imports

India set to sign USD 78 billion deal with Qatar extending LNG imports

Updated on: 06 February,2024 01:45 PM IST  |  Betul (Goa)
mid-day online correspondent |

India is likely to sign a monumental deal worth USD 78 billion to extend its liquefied natural gas (LNG) imports from Qatar for another 20 years until 2048, according to sources familiar with the matter

India set to sign USD 78 billion deal with Qatar extending LNG imports

India likely to extend LNG import deal with Qatar

India is likely to sign a monumental deal worth USD 78 billion to extend its liquefied natural gas (LNG) imports from Qatar for another 20 years until 2048, according to sources familiar with the matter.


Petronet LNG Ltd, India's largest LNG importer, is expected to finalize an agreement with QatarEnergy to extend a 2004 deal, which involves the purchase of 7.5 million tonnes of gas annually. This gas is utilized for various purposes such as electricity generation, fertilizer production, and conversion to compressed natural gas (CNG). The signing of this deal is anticipated to take place on the sidelines of the India Energy Week (IEW) being held in Betul, Goa, newswire PTI reported.


Sources told PTI that the renewed agreement comes with significantly reduced prices compared to the current deal, potentially saving India approximately USD 0.8 per million British thermal unit. Petronet currently imports 8.5 million tonnes per year of LNG from Qatar under two contracts, one of which is set to expire in 2028 and is now being extended for an additional 20 years. The second contract, involving 1 million tonnes per year, will be negotiated separately.


The current pricing structure, which is pegged at 12.67 percent of prevailing Brent crude oil prices plus a fixed component of USD 0.52 per million British thermal unit, is likely to undergo changes. Under the new contract, while the pricing mechanism is expected to remain relatively unchanged, the fixed charge of USD 0.52 will be eliminated. Additionally, Qatar has agreed to convert the shipping terms from Free on Board (FOB) to Delivered Ex Ship (DES), resulting in further cost savings of USD 0.30 per million British thermal unit.

The total cost of the annual 7.5 million tonnes import, based on an assumed Brent crude oil price of USD 80 per barrel, is estimated to be USD 3.9 billion, totaling over USD 78 billion over the 20-year period.

Furthermore, the new agreement will grant Indian buyers the flexibility to choose the arrival terminal for LNG cargoes within India, which is expected to result in additional cost savings for transporting the fuel through pipelines within the Indian grid. (With inputs from PTI)

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