Renegotiated Qatar LNG Deal to Help India Save $3bn

India will save about Rs 20,000 crore ($3bn) as it has renegotiated a long-term LNG import deal with Qatar, Prime Minister Narendra Modi said on Monday.

Speaking on the occasion of India’s Independence Day Modi said, "What was Qatar's right and we were bound to pay, we managed to get Qatar to renegotiate...to make possible something which was impossible," he said.

In December, a revised long-term contract was signed between Petronet LNG and RasGas. The revised formula bases 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 Petronet buys an additional 1 million tons of LNG annually.

Qatar also waived off a $1.5 billion penalty against India for lifting less gas than agreed.

India and Qatar have a contract under which New Delhi imports 7.5 million tons a year of LNG. The contract will run till April 2028.

While Modi said the revision in price formula would help save Rs 20,000 crore, oil minister Dharmendra Pradhan had recently told Parliament in a written question that at the revised formula, the country will save Rs 8,000 crore over the remainder of the contract, Press Trust of India reported.

Indian is also looking to renegotiate the price of Gorgon LNG. Petronet is in talks with ExxonMobil, one of the partners in the Gorgon project, to rework pricing for a 20-year 1.4 mtpa deal that the two parties signed in 2009.