Qatar Slashes Price of LNG it Sells to India

Qatar will now charge a much lower price for the LNG it supplies to India on a long term basis.

Press Trust of India reported Thursday that the new price will be $6-7 per million British thermal unit (mmBtu) as against $12-13 per mmBtu currently. New price regime will come into effect from Jan 1, 2016.

Qatar has also waived off a $1.5 billion penalty against India for lifting less gas than agreed, Press Trust reported.

India’s oil minister Dharmendra Pradhan said the reworked formula will apply to 7.5 million tons a year of LNG India buys from RasGas on a long-term contract ending in April 2028.

The revised contract was signed between Petronet LNG and RasGas on Thursday.

The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that Petronet buys an additional 1 million tonnes of LNG annually, according to Press Trust.