India could review long-term LNG contract prices
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.
“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.
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 2-3 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, told Reuters.
Pradhan said India is investing up to 5 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% by 2030 from the current 6.2%. ($1 = 71.4920 Indian rupees) (Reporting by Nidhi Verma; writing by Promit Mukherjee; editing by Richard Pullin)
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