Petronet LNG to Renew Long-Term Gas Contract Ending in 2028
Petronet, the leading importer of liquefied natural gas (LNG) in India, has announced its plans to renew its current contract for the supply of 7.5 million tons (MT) of LNG, which is set to expire in 2028. Earlier, the company was seeking an additional one million tons per annum of LNG, but it has now decided to continue with the same quantity in the renewed contract.
“We are going for renewal of the contract. Renewal means it will be of the same quantity.” V. K. Mishra, Head of Finance said.
During a press conference, CEO A. K. Singh emphasized the urgency of renewing a particular contract by 2023. The reason is that Qatar, which is the world’s top exporter of liquefied natural gas (LNG), has already signed a contract with China, Pakistan, and Bangladesh at a significantly lower price point of about 12.67%.
It is noteworthy that Qatar has the capacity to liquefy up to 126 million tons of gases annually, making it a key player in the global LNG market. In recent times, Qatar has also inked deals with several prominent companies worldwide, and India is eagerly looking forward to finalizing a deal with them as well.
“Our expectation is to have the long-term deal renewed at those levels. We are very seriously engaged with them and are negotiating for a better price,” A. K. Singh said.
Petronet, India’s largest liquefied natural gas (LNG) importer, has recently announced that its board has given the green light for a massive investment of Rs20,685 crore towards the establishment of a new petrochemical plant, which will double as an import terminal in Dahej, Gujarat. The new facility is anticipated to be completed soon. It will play a crucial role in ensuring a consistent supply of LNG to meet the growing energy demands of the country. This strategic move by Petronet demonstrates a significant step towards India’s goal of achieving energy security and self-sufficiency.
In Qatar, a recent verdict by a local court has been passed, sentencing eight Indian navy officials to death on the charges of spying for Israel. Despite this unpleasant event, Singh remains optimistic and hopeful that it will not have any adverse impact on the ongoing negotiations and business relations between the two nations. The possibility of these events affecting any bilateral trade talks is also considered to be very unlikely.
Petronet LNG CEO A. K. Singh said: “We are in business. It (the diplomatic row) will be handled at the highest level of the country… we hope this does not have any impact on business relations.”
India is one of the largest importers of natural gas with stable trade relations. The civil unrest between Russia and Ukraine has impacted crude oil imports. The widening conflict between Israel and Palestine raises concerns for the trade route’s integrity.
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