New Delhi, Dec 31: 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.
Petronet LNG Ltd (PLL), India's biggest gas importer, today 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, oil minister Dharmendra Pradhan said.
Pradhan said the reworked formula will apply to 7.5 million tonnes a year of LNG India buys from RasGas on a long-term contract ending in April 2028.
Would save Rs.12000 Cr for us.Hon'ble PM had on many occasions intervened with Emir of Qatar for this revision with falling global LNG price— Dharmendra Pradhan (@dpradhanbjp) December 31, 2015
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.
Pradhan said 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.