Platts: India's IOC Will Seek 'Pricing Flexibility' for Procuring New LNG

Indian Oil Corporation will seek "pricing flexibility" clauses for long-term LNG deals it will sign with global suppliers, a company official said Wednesday, noting the move is driven primarily by current low commodity prices. 

"[Our] senior management has spelt our stance on this matter and we are looking for price revision clauses and also signing deals of shorter duration," Santosh Kumar Srivastava, executive vice president at IndOil Montney, the Canadian affiliate of IOC, said in Vancouver on the sidelines of the 3rd International LNG in BC Conference. 

"Shorter" durations would imply offtake deals of 10 years to 15 years, rather than the 20 years to 30 years as is prevalent now with IOC, he said. 

Besides, the company is also looking at yet another clause under such long-term deals, which will include the right to divert cargoes, Srivastava said. 

IOC's new pricing approach will not be applicable for the Pacific Northwest LNG project in British Columbia, Canada, in which the company has 10% interest and has also contracted to buy 1.2 million mt/year or 10% of the total planned output, he said.  MORE