Business Standard: Australian LNG to Cost Nearly Half the Price of Qatar Gas

India will start importing natural gas (LNG) from Australia by end of the year at a rate which will be about 40 per cent less than the price of its current shipments from Qatar on a long-term contract.

Petronet LNG Ltd will in December start receiving liquefied natural gas (LNG) from Exxon Mobil-owned Gorgon LNG plant in Australia on a 20-year deal, a company official said.

The price is directly indexed to crude oil prices and at ruling oil price of USD 50 per barrel, LNG at Australian port will cost USD 7.25 per million British thermal unit. After adding shipment cost of around USD 1, the landed price of the Gorgon LNG would be around USD 8.2, he said.

While its Australian contract is indexed to average global oil prices in the preceding one year, Petronet's 25-year deal with RasGas of Qatar is on a five-year moving average of Japanese Crude Cocktail (JCC).

So, LNG from Qatar costs about USD 12.667 per mmBtu at the port of loading and nearly USD 13 at Indian coast.

Industry sources said long-term LNG from Qatar is costlier than what is available on the spot market at about USD 7 per mmBtu rate, reflecting the slump in international oil and gas prices. MORE