India’s biggest state owned gas importer Petronet LNG has signed a revised contract with RasGas of Qatar to import gas at a significantly lower price than earlier.
Under the new contract, Rasgas will supply Liquefied Natural Gas (LNG) to Petronet at 6-7 dollar per million British thermal units (mmBtu) from January 1, 2016. It would supply to 7.5 million tonnes of LNG India until the long-term contract ending in April 2028
The new rate is sharply lower than 12-13 dollar per mmbtu agreed earlier and has been revised after falling global prices of oil and gas, saving consumers around Rs.4,000 crore.
About RasGas
- RasGas Company Limited is a liquefied natural gas (LNG) producing company in Qatar. It is the second-biggest LNG producer in Qatar after Qatargas. RasGas operates seven LNG trains located in Ras Laffan Industrial City.
- RasGas also operates helium plants which produce 25% of the world’s helium, and make Qatar the second largest helium exporter.
- RasGas was established in 2001. The chief executive officer of the company is Hamad Rashid al Mohannadi.
The new price formula between the two companies is a win-win situation for both countries. It also marks Union Government’s biggest diplomatic win to leverage India’s position as one of the world’s biggest energy consumers by striking better price bargains for its companies.
It also indicates that tumbling oil prices and a global gas glut due to overproduction and fall in demand due to global economic slowdown are compelling exporters especially OPEC countries to offer better deals to retain their share in global energy trade.