India’s Petronet LNG is hoping to conclude a deal with Qatar extending LNG contract beyond 2028 for 7.5mil mt/year, amidst diplomatic row between the two countries. Indian government has issued strong reaction to death sentence, awarded to eight Indian nationals by the Qatari court last week. New Delhi is planning to challenge the death sentence, in the apex Qatari court and also using its traditionally strong political and diplomatic ties with Qatar to deal with the situation.
Meanwhile, Petronet has time until December to renew its term LNG supply deal with Qatar beyond 2028. Petronet which has just two months left to the deadline, is not seeking more LNG beyond 7.5mil mt/year LNG. Petronet LNG Director Finance V K Mishra told analysts during a presentation that Petronet seeks the same volume while renegotiating the extension of term deal.
Petronet LNG official did not make any comment on possible price levels being negotiated extending the deal. The current LNG supply deal with Qatar which will end in 2028, has been indexed at 12.67% of the Brent crude plus $0.52.mBtu as constant. India hopes to clinch a deal at a price lower than the existing levels, considering the fact that the Qatar had recently signed deals with the Chinese and the Bangladeshi buyers at below 12% of average Brent crude prices.
Mishra said spot LNG prices are unlikely to go above $17 or $18 despite upcoming demand for LNG during the winter the months. Sustained demand for LNG from Europe during the winter months is likely to help prices remain strong during winter.