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Petronet LNG of India extends Qatari term LNG contract for 20yrs

Petronet LNG Limited of India has executed a LNG Sale & Purchase Agreement (LNG SPA) for purchase of around 7.5 MMTPA LNG with QatarEnergy on long-term basis on Tuesday.

The current deal, which expires in 2028, is priced at 12.67 per cent of prevailing Brent crude oil prices plus a fixed component of $0.52 per million British thermal unit. Under the new contract, the slope would remain more or less the same but the fixed charge of $0.52 would be scrapped.

New contract is pursuant to extension of an existing LNG SPA for LNG supply of around 7.5 MMTPA LNG Sale & Purchase Agreement on FOB basis, signed on 31st July 1999 for supplies till 2028. Under the new agreement, LNG supplies will be made on delivered (DES) basis commencing from 2028 till 2048.

Similar to earlier agreement of 1999, the LNG volumes under the new SPA shall also be offtaken by the state-owned GAIL (India) Limited (60%), Indian Oil Corporation Limited (30%) and Bharat Petroleum corporation Limited (10%) after regasification primarily from Dahej Terminal of PLL on substantially back to back basis.

This LNG SPA between PLL and QatarEnergy will ensure energy security of the India and assure continued supplies of regasified LNG to major consuming sectors like fertilisers, CGD, refineries & petchem, power and other industries.

Akshay Kumar Singh, Managing Director & CEO of Petronet LNG Limited said “the existing long-term agreement between Petronet LNG & QatarEnergy today accounts for around 35% of India’s LNG imports and is of national importance.”

Petronet LNG Limited is a Joint Venture Company with equity participation from four state-owned Oil & Gas major GAIL India, ONGC, IOCL and BPCL each holding equity of 12.50%, and together totalling to 50%. PLL was incorporated on 2nd April 1998 under the Companies Act, 1956.

The Company had set up Country’s first LNG Receiving and Regasification Terminal and started its operations in year 2004, with an initial nameplate capacity of 5 MMTPA at Dahej, Gujarat. Since then, the capacity of the Dahej terminal has been expanded in phases (10 MMTPA in year 2009, 15 MMTPA in 2016 and 17.5 MMTPA in 2019).

To cater the gas requirement of the Southern India, Petronet LNG Limited commissioned its second LNG receiving, storage and regasification terminal in Kochi in year 2013 with nameplate capacity of 5 MMTPA.

Infrastructure-wise, PLL has 47% share of the country’s existing LNG Regas Capacity and handles around 75% of Country’s LNG imports. PLL’s operations accounts for around 33% of total Natural gas supplies in the Country.

In line with Government of India’s vision, PLL is undertaking a brownfield expansion of regas capacity of Dahej LNG Terminal from 17.5 MMTPA to 22.5 MMTPA. PLL is constructing two additional LNG Storage Tanks at its Dahej LNG Terminal which will be commissioned shortly. PLL is in the process of constructing 3rd Jetty at Dahej which will have a unique feature of handling ethane and propane besides LNG. Further, PLL is also undertaking the activities for setting up an FSRU based LNG terminal with an initial capacity of 4 MMTPA, with a future provision of converting it to land based terminal of 5 MMTPA capacity on the East Coast of India at Gopalpur, Odisha.

Petronet is also setting up Petrochemicals project of 750 KTPA of PDH & 500 KTPA of PP plant including propane and ethane handling facility at Dahej, Gujarat.

editor@lngworldwide.com