New Delhi: The revision in the liquefied natural gas (LNG) agreement with Qatar has helped bring down the cost of importing natural gas to less than $5 per million metric British thermal units (mmBtu) from $12, oil minister Dharmendra Pradhan said on Monday.
In December last year, India got Qatar to agree to slashing gas price by half to match a slump in global energy rates, helping the nation save billions of dollars, as well as get waiver from a ₹ 12,000 crore liability for short-lifting of gas.
India, which got $15 billion of benefits during the first 11 years of the term contract with Qatar beginning 2003 by way of enjoying low gas prices when the world energy rates were rising, is currently paying less than $5 per mmBtu for 7.5 million tonnes a year of LNG it buys from RasGas Co. Ltd of Qatar.
“Earlier the prices during 2015 were in excess of $12 per mmBtu. The current price applicable under the contract works out to less than $5 per mmBtu based on prevailing crude prices," Pradhan said in a written reply to a question in the Lok Sabha.
This revision, applicable from 1 January, has led to making LNG cheaper for the end consumers, he said.
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 LNG Ltd (PLL) buys an additional 1 million tonnes of LNG annually.
Further, PLL—the firm that imported LNG from RasGas—has executed an agreement for additional supply of 1 million tonnes a year of LNG for about 12 years with effect from 1 January 2016 at the prevailing market prices, Pradhan said.
He said Qatar will also not seek ₹ 12,000 crore from PLL for “under-lifting" LNG from RasGas by 38%.
“RasGas and Petronet LNG Ltd agreed to rescheduled the LNG quantity not taken by Petronet LNG Ltd during 2015 to a future period and RasGas has agreed to waive the take or pay liability under the contract for the year 2015," he said.
PLL, a joint venture of state-owned Indian Oil Corp. Ltd, GAIL (India) Ltd, Oil and Natural Gas Corp. Ltd and Bharat Petroleum Corp. Ltd, had started importing LNG from 2004.