India plans to reduce LNG imports from Qatar
The Dollar Business Bureau Pitching for reduced dependence on energy imports, the Prime Minister of India, Narendra Modi on Friday said, ‘India should cut down the oil imports by 10% by 2020’. In line with the above statement, India is likely to cut down the contracted volumes of gas from a Qatar-based company RasGas Company Limited, by about 10%. Under the first Sales and Purchase Agreement (SPA) that was signed between India and Qatar in 1999, both the sides had agreed on reducing contracted volumes on acceptable terms. The reduction in import of gas is in view of the gas pricing in spot market which, has lowered by almost $6/BTU as compared to the pricing that is being followed under the India-Qatar long-term agreement. While the spot delivers of gas are being priced at $7/BTU, the gas under the SPA contract is priced at $13/BTU. The Government of India’s Petronet LNG imports 7.5 million tonnes annually from the Qatar-based supplier under the long-term agreement. In another move, the Indian government also expressed its willingness to sell gas to Pakistan at cheaper prices. In this regard, the Union Petroleum Minister, Dharmendar Pradhan, said that the Indian public sector companies are strong enough to sell gas to Pakistan’s domestic sector at cheaper prices than what the neighbouring country is buying at currently. Recently, the government has also announced plans for the revival of stranded domestic gas-based units to boost power generation in the country.
This article was published on March 30, 2015.