The Hindu Business Line : Qatar keen to supply 1.25 mt more LNG for short term

The supply of 1.25 million tonnes of LNG to India on a year-to-year basis will be in addition to the 7.5 million tonnes already contracted from Qatar for supply over a 25-year period.

The official told Business Line that negotiations for the short-term supply would begin soon.

Pricing of LNG will be a major issue, with global gas prices rising, though not on the scale of crude oil.

India is currently able to meet only half of its gas requirements, with 65 million standard cubic metres per day (MMSCMD) of supplies available from domestic sources and about 25 MMSCMD available through regassified LNG.

As for the terminals where supplies will be received, the official said with the Kochi terminal project running behind schedule, India could consider taking supplies intended for that terminal at Dahej, Gujarat.

Qatar has been supplying 5 million tonnes of LNG to India since January 2004 under a 25-year contract, with supplies being received at Dahej, the first LNG terminal to be commissioned in India. In addition, Qatar's RasGas Company Ltd has been contracted to supply 2.5 million tonnes of LNG at the Kochi terminal of Petronet LNG Ltd (PLL), once it is completed by 2009-end.

This additional 1.25 million tonnes of supplies from Qatar on a short-term basis will help bridge the gap till the 2.5 million tonnes supplies become available, the official said.

In fact, even for the 2.5 million tonnes of LNG already committed by Qatar, certain conditions have been attached, which India is trying to meet so that it can receive the supplies earlier than 2009.

Moreover, the Dahej terminal is in the process of being expanded to handle 10 million tonnes of LNG re-gassification, which would make available spare handling capacity.

India is keen to have more LNG supplies from Qatar to meet the growing domestic needs.

As Qatar has already committed most of its current production to various countries, India is hoping it would be able to persuade RasGas to supply some of its spare capacity estimated to be around 1.25 million tonnes.

An indication of Qatar's willingness to supply additional LNG was available during the recent visit of the Petroleum Secretary, Mr S.C. Tripathi, to Qatar, where he met officials of RasGas.

The supply of additional LNG is likely to begin from next year and the commercial terms will be negotiated on an annual basis, the official said.

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