Qatar has agreed to lower the price of gas it sells to India on a long-term contract by about USD 6 billion to reflect the slump in global energy rates and also waived the Rs 12,000-crore penalty for ‘short-lifting’ in 2015.
Benefits
Petronet LNG Ltd (PLL), India’s biggest gas importer, signed a revised contract with RasGas of Qatar. The price as per the revised formula will come to USD 6-7 per million British thermal unit as against USD 12-13 per mmBtu currently.
The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that PLL buys an additional 1 million tonnes of LNG annually.
The trailing three-month average Brent price is about USD 44 a barrel while the average of Japan Crude Cocktail for the 5-year period ended September 30 was USD 94.
Qatar will also not seek Rs 12,000 crore from PLL for ‘under-lifting’ LNG from RasGas by 32 per cent.
The value of the under-lifted cargoes in 2015 is Rs 12,000 crore and if the change-to-price formula was implemented, it would suggest a USD 2.5 billion buyer saving over three years.
Current Affairs: 31st December, 2015 Important Days in November and December Current Affairs bullet points Round up 15th to 21st December, 2015 Current Affairs Round up November, 2015.
Join The Discussion