India seeks better LNG prices from Qatar
NEW DELHI, July 29, 2015 – India has so far delayed the delivery of at least 20 shiploads of LNG from Qatar in 2015, as the importer seeks to cut a better deal with its top gas supplier. The deferral gives India time to ask Qatar’s RasGas to bring its LNG prices, which are currently pegged to a moving average of crude oil, more in line with those currently attainable on international spot markets. India pays Qatar around $13 per million British thermal unit, whereas current spot rates float between $6 and $7.
The move marks the exercising of India’s right under a 25-year long-term contract with Qatar to defer the purchase of up to 30 percent of annual supplies until a later date. The delayed cargoes amount to around 1.25 million tonnes of LNG, or about 17 percent of the 7.5 million tonnes India buys every year from RasGas.
Petronet, the Indian state entity that imports LNG, says it cannot sell gas to consumers at the current rates. The fertilisers and power sectors, for example, are turning to cheaper alternatives such as fuel oil and naphtha.
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