New Delhi, March 22: Qatar has agreed to supply 4 million tonnes of additional liquefied natural gas (LNG) to India, but at more than double the rate of Reliance Industries’ KG-D6 gas.
The world’s largest LNG exporter, which currently sells 7.5 million tonnes of LNG every year, is seeking a price linked to crude oil that at prevailing rates comes to over USD 10 per million British thermal unit.
“The proposal is for supply of 0.3 million tonnes of LNG this year, 0.5 million tonnes in 2011, 2.5 million tonnes in 2012 and 4 million tonnes from 2013,” Petroleum Secretary S Sundareshan told reporters here. “This is, of course, subject to price negotiations which we will enter now.”
Qatar wants to divert cargoes it had committed to the US and Europe to Asia at a better price. Qatar’s agreement with the US provides for a clause where it can divert LNG to other markets if it realises a better price. Henry Hub price of gas, the pricing point for natural gas futures contracts in the US, is currently between USD 4 and 4.2 per mmBtu.
“RasGas (of Qatar) and Petronet LNG/GAIL India will engage in discussions on pricing and I hope in the next few weeks they can finalise agreements,” Qatar Deputy Premier and Minister of Energy and Industry Abdullah Bin Hamad al-Attiyah, who had last night discussed the issue with Petroleum Minister Murli Deora, said.
The additional supplies would be “long-term, typically 15-20 years,” he said.
—–PTI