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Qatar to sign cheaper long-term LNG deal to supply India

January 22, 2024 at 3:32 pm

Qatar’s production of liquefied natural gas and gas-to-liquid, administrated by Qatar Petroleum in Doha, on 6 February 2017 [KARIM JAAFAR/AFP/Getty Images]

QatarEnergy, one of the world’s largest exporters of liquefied natural gas (LNG), is to sign a long-term agreement to supply Indian buyers, offering more economical and flexible terms compared with previous contracts, Reuters reported on Friday citing trade sources.

The new agreement with India’s leading natural gas importer, Petronet LNG Ltd, is expected to be finalised by the end of this month or early February and would extend contracts set to expire in 2028. The new deal will reportedly offer lower pricing and destination-flexible cargoes, until at least 2050.

The Gulf state currently supplies 8.5 million tonnes of LNG per annum to Indian importers. The move is part of Prime Minister Narendra Modi’s aim to increase the share of natural gas in the country’s energy mix to 15 per cent by 2030 from about 6.3 per cent today.

In October, QatarEnergy signed a 27-year agreement to ship LNG to Europe by agreeing to deliver cargoes for Eni in Italy beginning in 2026, following similar deals with Shell and TotalEnergies to supply to the Netherlands and France, respectively.

That same month, Qatar paved the way for the world’s largest LNG project, the North Field expansion project, which will boost Doha’s export capacity by 48 million tons per annum by 2027.

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