India, Qatar Close to Signing a New LNG Deal

India will most likely sign a new LNG deal with Qatar soon.

According to Indian newspaper The Telegraph, the new deal will allow India to take advantage of lower global prices at $6-7 per mBtu.

India’s Petronet LNG has been importing Qatari LNG under a 25-year deal that offered India a low rate of $2.53 per mBtu for the first five years for a fixed offtake of 7.5 million tonnes (mt), followed by a rate based on a five-year moving average of crude that raised the price to $12-13 per mBtu.

With international LNG prices currently much lower than that, Petronet was reluctant to lift the fuel under the terms set.

Prime Minister Narendra Modi is expected to visit Qatar in the future at the personal invitation of the Qatari ruler and officials want to finalise the deal before this trip, The Telegraph reported Friday.

Officials said Qatar would also waive a penalty it could have imposed on India for having failed to lift 7.5 mt of gas per year that it was supposed to.