On Tuesday, the CEO of India’s top gas importer Petronet LNG, Prabhat Singh, said that the company is close to finalizing a liquefied natural gas (LNG) deal with prices around the spot markets.
The company will import at least 1 mtpa of LNG for 10 years, with pricing aligned to Henry hub natural gas futures in the US and Dutch TTF gas futures and shipped on a delivered ex-ship basis. The bids were opened earlier this year.
According to Singh, Petronet has accepted 13 offers and the deal is close to being finished. He did not disclose a specific time.
At the moment, Petronet is under a deal to purchase 7.5 mtpa of LNG from Qatar and 1.44 mtpa from Exxon Mobil Corp. In the current long-term deals, LNG prices are around USD3.5-4.5/mmBtu, compared to the spot price of around USD2/mmBtu.
Petronet announced force majeure for supplies under long-term deals in March as a nationwide coronavirus-related lockdown in India crushed demand. Qatargas and Exxon objected to the force majeure, which waives contractual obligations.
Petronet’s head of finance V.K. Mishra said that the company has invoked the clause on eight LNG cargoes from Qatar and one from Exxon for loading from March to May, and is working out on a solution because it is admissible in the contract.
Petronet was also in discussion with Qatargas to renegotiate gas pricing under its long-term deals as spot prices have fallen.
