News ID: 257830
Published: 0355 GMT August 26, 2019

India could review long-term LNG contract prices

India could review long-term LNG contract prices
Employee works on the production line of tanks for liquefied natural gas (LNG) at an energy equipment company in Nantong, China. (news.yahoo.com)

India will look at reviewing the pricing of its long-term liquefied natural gas (LNG) deals at an "appropriate time" due to a fall in spot prices, Oil Minister Dharmendra Pradhan said on Monday, Reuters reported.

"We will look at reviewing long-term LNG contracts," Pradhan said at a natural gas event in New Delhi.

The spot price of imported LNG into Japan, one of world's biggest importers of the super-cooled fuel, has more than halved in the last year.

This has led buyers in Japan and China to request delays in term cargoes, while many other countries are considering lifting lower term volumes, experts have said.

"Long-term contracts are supposed to be honored. We will look at an appropriate time (to review). In the past also we had renegotiated the deals," Pradhan said.

India's biggest gas importer Petronet LNG Ltd said earlier this month that it would consider renegotiating its long-term LNG supply deals if spot prices remained weak for a prolonged period.

"We have to be sensitive to the international market. If spot prices continue to be low for two to three years then you don't have much of a choice, and there would be a case to look at renegotiation," Prabhat Singh, Petronet's managing director, said.

Pradhan said India is investing up to five trillion rupees ($70 billion) to boost its natural gas sector, including city gas distribution projects, setting up LNG liquefaction facilities and natural gas exploration.

Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country's overall energy mix to 15 percent by 2030 from the current 6.2 percent.

   
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