India Renegotiates Gorgon LNG Contract

India has successfully renegotiated its long-term contract with ExxonMobil for supply of LNG from the Gorgon LNG project in Western Australia, Indian oil minister Dharmendra Pradhan said September 9.

India was able to "address the long-term price issue of LNG from Gorgon" to suit the Indian market, with Indian consumers due to receive LNG at an "amicable price soon", which has been done in a similar way to what the country did with LNG from Qatar, Pradhan said on the social networking site, Twitter, without providing pricing details. 

At present, Qatar is India’s biggest LNG supplier. And, with declining global LNG prices, India insisted on renegotiating the price lower with the Western Asian LNG giant. In December 2015, the two parties signed a revised deal with a formula based on the price of a three-month average figure for Brent crude oil, replacing a five-year average of a basket of crude imported by Japan.

In 2009, Exxon and Petronet LNG signed a sales and purchase agreement for the long-term supply of liquefied natural gas from the proposed Gorgon LNG project in Western Australia.

The agreement is for supply of approximately 1.5mn mt/yr of Exxon’s share of LNG from the Gorgon project over a 20-year term. Supplies began earlier this year.

India has four operating LNG terminals: Dahej, Hazira, Dhabol and Kochi. According to a document released by the oil ministry June 3, 2016, India’s LNG terminal capacity could more than double by 2022 as existing terminals expand and new ones are commissioned.

Shardul Sharma