BW Communities

Petronet Inks Long-Term LNG Deal With Gazprom

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Petronet LNG has signed a preliminary 25-year deal with Russia's Gazprom to buy as much as 2.5 million tonnes a year of liquefied natural gas (LNG) to meet surging demand in Asia's third-largest economy. Based on market prices of $10 per million British thermal units, the deal could be worth about $1.3 billion a year, or $32.5 billion over 25 years. "We will now negotiate pricing, volume, supply timings etc. Discussions on these would begin in a month's time and we want to expedite this and complete the deal as soon as possible," A. K. Balyan, chief executive at Petronet, told Reuters. India's trillion-dollar economy is already the world's eighth-largest importer of LNG, and those imports could rise as much as five-fold in the next decade as its domestic gas output falls and demand surges. Petronet currently receives 7.5 million tonnes per year of LNG from Qatar's Rasgas under a long term deal at its 10 million tonne a year regassification terminal at Dahej in western Gujarat state. It also has a deal to buy 1.5 million tonnes of LNG annually from Australia's Gorgon project from 2014, to be regassified at its 5 million tonnes a year terminal at Kochi. Kochi terminal is expected to start operations in October-December 2012. Petronet is also studying the possibility of a third plant in eastern India. "This MOU (memorandum of understanding) is a key step in diversifying our LNG supply portfolio and this relation will go long way in developing mutually beneficial relation between the two companies," Balyan said in the statement. (Reuters)