Petronet LNG is bargaining hard with Qatar to get additional liquefied natural gas (LNG) at the current long-term contract rates.

According to Petronet, gas sourced from Qatar remains the most competitive at the prevailing contract rates of around $13 a unit (gas is measured in million British thermal units).

However, Qatar, the world’s largest gas seller, has been seeking the spot rates, which is currently prevailing between $17 and $18 a unit.

AK Balyan, Managing Director and CEO, said talks with Qatar for additional 2.5 million tonnes (mt) LNG annually are at a critical stage. The two are negotiating on pricing.

India’s biggest importer of LNG has a long-term contract to buy 7.5 mt from Qatar and now Petronet is trying to convince the Gulf country to extend the current contract by another 2-3 mt annually at an ‘affordable’ price, Balyan told Business Line .

“We have moved quite a bit on that. Actually, we have narrowed a lot and they have also realised. The Indian market still needs the support (discounted rates). It should not be equated with Japan, (South) Korea and Taiwan,” said Balyan.

On the other hand, Qatar feels India is a developed country and it is buying LNG from many sources. “We are still insisting that India be viewed distinctly because we are a big market. We buy so much from Qatar, so they should consider on pricing and other contractual agreements,” said Balyan.

Petronet does not rule out seeking long-term supplies from other sources.

However, Qatar remains on focus because of the ‘reliability’ of supplies.

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