India renegotiates LNG deal with Exxon

[Shahzaz ud din]

India renegotiates LNG deal with Exxon
Reuters | Published — Sunday 10 September 2017

India raises GST tax rates for larger cars

• 
  Madhya Pradesh seeks to quash Goldman-backed India solar project

• 
  LNG sellers ready for more flexible contracts after years of pressure

NEW DELHI: India has renegotiated the pricing of liquefied natural gas (LNG) imported from Australia’s Gorgon project to make the imported fuel affordable to price-sensitive domestic customers, oil minister Dharmendra Pradhan said on Saturday.
India has been trying to leverage its position as one of the biggest energy consumers to strike better bargains for its companies. In 2015 it renegotiated the LNG pricing formula with Qatar’s Rasgas to buy the gas at half the original price.
“Indian customers will receive (Gorgon) LNG volumes at an amicable price soon. This is done in a similar way to what we did with LNG from Qatar,” Pradhan said in a tweet.
India’s top gas importer Petronet LNG signed a deal in 2009 with Exxon Mobil to buy 1.5 million tons of LNG annually from Gorgon for 20 years. At that time Petronet agreed to buy LNG at a cost equivalent to 14.5 percent of the oil price and to pay for the shipping freight as well.
Supplies under the deal began from January 2017, with the landed price of gas costing about $11-$13 per million British thermal units (mmBtu), almost double that of Asian spot LNG prices.
The Gorgon gas prices are now linked to about 13-13.5 percent of the global oil price on a delivered basis, two sources with knowledge of the negotiation said.
Renegotiation of the deal also shows how softening oil prices and a global supply glut are forcing LNG exporters to offer better deals to retain their share in global energy markets.
India wants to gradually move to a gas-based economy and aims to double the cleaner fuel’s share in its energy mix to 15 percent in the next few years.
Petronet’s managing director Prabhat Singh declined comment and Pradhan did not specify changes in the pricing formula.
“Happy to share good news that India has, yet again, been able to address the long-term price issue of LNG from Gorgon to suit Indian market,” Pradhan said in a tweet.

 

[kaykay]

Done and dusted. We got a very good deal here like with Qatar last year. Kudos to Indian negotiators.

 

[RISING SUN]

India to renegotiate LNG rate with US, Russia
After getting Qatar and Australia to lower gas price, India is seeking to renegotiate rate of LNG (liquefied natural gas) it has contracted from the US and Russia to reflect current market realities, GAIL Chairman and MD B C Tripathi said on Wednesday.

"We have successfully renegotiated, along with Petronet LNG Ltd, two long-term (LNG import) contracts. We are now working on third and fourth contract," he said at a Ficci (Federation of Indian Chambers of Commerce and Industry) conference here.

While Tripathi did not name the contracts, he was referring to last month's in-principle agreement with Exxon Mobil Corp for a cut in price of 1.44 million tonnes a year LNG to be imported from Australia's Gorgon project.

In 2015, India renegotiated price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping save Rs 8,000 crore.

"This is how market structure has changed," Tripathi said. "The point which I am trying to drive is that we are moving from a supply constraint market to a supply surplus market."

Tripathi said market structure has changed from a time when Indian firms struggled to get an appointment with LNG exporters to gas suppliers now running after the world's fastest growing energy market.

This has primarily happened because availability has increased and prices have slumped in global energy markets.

Though he did not name the two other contracts for which GAIL, India's biggest gas distributor, is seeking price renegotiation, officials said he was referring to LNG contracted from the US and Russia.

GAIL wants to renegotiate the 2011 sales and purchase agreement (SPA) with Cheniere Energy for import of 3.5 million tonnes of LNG annually, with yearly fixed fees of $548 million and a term of 20 years.

The state-owned firm had agreed to pay Cheniere a price of $3 per million British thermal unit (mmBtu) plus 115 per cent prevailing Henry Hub natural gas price.

Officials said GAIL wants the fixed portion to be lowered to bring down landed cost of LNG to around $7-8 per mmBtu as against the present $9.7.

LNG in the spot or current market is available for less than $6 per mmBtu.

The US supplies are scheduled to begin from the next year.
Besides the 3.5 million tonnes per annum of LNG from Houston-based Cheniere, GAIL has booked 2.3 million tonnes a year capacity at Dominion's Cove Point liquefaction facility.

Also, GAIL wants Russia's Gazprom to delay and lower the price of gas it has purchased under a 20-year deal. Shipments under the deal, initially expected to start in 2018-19, are linked to crude oil prices.

GAIL had in 2012 signed a deal with Gazprom to buy 2.5 million tonnes a year of LNG for 20 years from the Shtokman LNG export plant in the Barents Sea.
https://timesofindia.indiatimes.com...h-us-russia/articleshow/60939421.cms?from=mdr

 

[BATMAN]

India already had very good deal with US.
Look at Pakistan... our politicians are not willing to share Qatar gas deal details, with anyone!

 

[RISING SUN]

India already had very good deal with US.
Look at Pakistan... our politicians are not willing to share Qatar gas deal details, with anyone!

We also had our fair shares of corrupted politicians in last government. We are not immune to corruption. Thank you.