The Hindu : Business : Qatar to supply 4 mt of LNG from 2013

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Tuesday, Mar 23, 2010
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Qatar to supply 4 mt of LNG from 2013

Special Correspondent

Wants to divert cargoes from the U.S. and Europe to Asia at a better price

Seeks a price linked to crude oil
RasGas, Petronet to discuss on pricing

— PHOTO: RAJEEV BHATT

ENERGY SECURITY:Deputy Premier and Minister of Energy and Industry, Qatar, Abdullah Bin Hamad Al-Attiyah (right), with Union Minister for Petroleum & Natural Gas Murli Deora at the 6th Asia Gas Partnership Summit in New Delhi on Monday.

NEW DELHI: In a major initiative for achieving energy security for the country, Qatar on Monday agreed to supply four million tonnes of additional liquefied natural gas (LNG) to India but differences prevailed on the price at which LNG would be supplied.

The four million tonnes of LNG tie-up was reached at the bilateral meeting between the visiting Deputy Premier and Energy Minister of Qatar, Abdullah Bin Hamad Al-Attiyah and the Petroleum and Natural Gas Minister Murli Deora here on Sunday.

The announcement for the same was made at the 6 {+t} {+h} Asia Gas Partnership Summit being held in New Delhi by GAIL (India), Federation of Indian Chambers of Commerce and Industry (FICCI) and International Gas Union.

Qatar has agreed to supply additional four million tonnes of LNG but at more than double the price Reliance Industries Limited's (RIL) KG-D6 gas cost. Qatar, known as the world's largest LNG exporter, is seeking a price linked to crude oil that at prevailing rates comes to over $10 per million British thermal unit (mBtu).

“The proposal is for supply of three lakh tonnes of LNG this year, five lakh tonnes in 2011, 2.5 million tonnes in 2012 and four million tonnes from 2013. This is, of course, subject to price negotiations which we will enter now,” Petroleum Secretary S. Sundereshan told newsmen here.

Qatar wants to divert cargoes it had committed to the U.S. and Europe to Asia at a better price. Its agreement with the U.S. provides for a clause where it can divert LNG to other markets if it realises a better price. Henry Hub price of gas, the pricing point for natural gas futures contracts in the U.S., is currently between $4 and $4.2 per mBtu.

“RasGas (of Qatar) and Petronet LNG/GAIL India will engage in discussions on pricing and I hope in the next few weeks they can finalise agreements,” Mr. Abdullah Bin Hamad al-Attiyah said here. The additional supplies would be long-term, typically 15-20 years, he said.

Mr. Sundareshan said the supplies were being discussed for import at Petronet's Dahej terminal in Gujarat and the yet-to-be commissioned Dabhol import facility in Maharasthra. India is, however, sceptic of the offer as the asking price is too high.

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