Qatar is not willing to renegotiate prices under its long-term liquefied natural gas (LNG) contracts with India, Qatari energy minister, Saad Sherida Al-Kaabi, announced yesterday.
Reuters quoted Al-Kabbi at an event with his Indian counterpart, Dharmendra Pradhan, in New Delhi as saying that Qatar was keen on “supplying more volumes of LNG to India.”
“We are not renegotiating contracts; we stick with contracts – both sides,” the Qatari official stressed, adding that Doha was hoping for “additional new contacts and volumes to comply with requirements from India.”
On his part, Pradhan said that the price renegotiation would “make supplies cheaper for price-sensitive customers after a sharp fall in spot prices of the cleaner fuel.”
India imports 8.5 million tonnes of LNG annually under long-term supply deals with Qatar. The massive imports date back to 1999 when the Indian government signed a long-term LNG deal with Qatar for supplies from 2004.
Under the deal, the price of gas was linked to the cost of crude, as oil markets were well developed compared with that of LNG. As a result, the deal was renegotiated in 2015 with almost 50 per cent cut in prices, a move after which India had agreed to buy an extra one million tonnes per annum of the super-cooled gas from Qatar.
“The current formula of benchmarking gas prices with crude oil is not correct,” Pradhan pointed out, stressing that there should be an “independent pricing formula for gas.”
“We must find a formula between the current practices and other international prices,” he added.