GAIL Seeks Renegotiation of Gorgon LNG Deal

GAIL (India) is looking to renegotiate LNG deals from ExxonMobil-owned Gorgon LNG plant in Australia.

The need for review of the deal and re-negotiate the price comes in view of the falling gas prices world over, The Hindu said.

Officials in the Petroleum Ministry said that GAIL Director (Marketing) Prabhat Singh had written to Petronet Managing Director A. K. Balyan seeking reduction in the price of Gorgon LNG in view of the changed scenario worldwide, the newspaper reported.

Petronet LNG, had, in August 2009, signed a 20-year deal to buy 1.44 million tonnes per annum of LNG at a price equivalent to 14.5 per cent of the ruling oil rates. This compares to U.S. Henry Hub rate of about $4 using which GAIL has recently signed deals to import gas from the U.S. Qatar, the world’s largest LNG producer, sells gas to India at much lower rates.

Petronet is to get Gorgon LNG in the second-half of 2015, with initial supplies being about 0.48 million tonnes, ramping up to contracted 1.44 million tonnes in two years.