New Delhi : India is in talks with Qatar to import at least 10% less liquefied natural gas (LNG) under a long-term deal after a slide in spot prices has cut demand by local buyers, an Indian government source with knowledge of the negotiations said.<\/p>\n
New Delhi would for the first time use a 10% reduction permissible under a 25-year contract with Qatar’s RasGas to import up to 7.5 million tonne a year of the super cooled fuel, said the source.<\/p>\n
“We want to lift as little volume as possible under the contract,” the source told Reuters, adding that India intended to use a tolerance limit of 10% in 2015.<\/p>\n
“But we are negotiating for cuts deeper than 10%. All LNG terminals are running at lower capacity as customers are not lifting volumes,” said the source, who declined to be identified due to the sensitivity of the issue.<\/p>\n
Telephone calls to Qatar’s LNG producer RasGas seeking comment were not immediately answered.<\/p>\n
India’s biggest importer Petronet LNG received its first cargo from RasGas under the current deal in 2004 with pricing linked to the oil.<\/p>\n
India’s LNG import costs under the deal are currently around $13 per million British thermal units (mmBtu), versus spot prices of $6-$7 per mmBtu, according to R K Garg, head of finance at Petronet LNG.<\/p>\n
Asian spot LNG prices rose as high as $20 per mmBtu last year, buoyed by soaring demand from emerging markets such as China and India as well as extra Japanese imports due to the Fukushima nuclear meltdown.<\/p>\n
But spot prices have come off by two-thirds since February 2014 as Asia’s economies slow and new production, especially in Australia, comes online.<\/p>\n
Petronet’s Garg said that Indian LNG demand had been lower than anticipated in the first quarter, although he added that orders from the fertilizer sector were expected to rise by June.<\/p>\n
Pricing under the deal is linked to the previous 12-month Japan Crude Cocktail (JCC), including caps and floors based on average JCC prices of the past 60 months.<\/p>\n
While this formula reduces volatility, it does not reflect price falls as much as spot pricing.<\/p>\n
Prior to 2009, the long-term deal included a rebate in order to stimulate India’s gas demand, but with the discount now gone the spot market has become more attractive.<\/p>\n
Gas accounts for almost 8% of India’s energy demand and the government wants to lift its use versus coal to cut pollution.<\/p>\n","protected":false},"excerpt":{"rendered":"
New Delhi : India is in talks with Qatar to import at least 10% less liquefied natural gas (LNG) under a long-term deal after a slide in spot prices has cut demand by local buyers, an Indian government source with knowledge of the negotiations said. New Delhi would for the first time use a 10% reduction permissible under a 25-year contract with Qatar’s RasGas to import up to 7.5 million tonne a year of the super cooled fuel, said the source. “We want to lift as little volume as possible under the contract,” the source told Reuters, adding that India […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-12190","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/12190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=12190"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/12190\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=12190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=12190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=12190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}