RasGas, Petronet revise LNG contract to lower Indian gas prices

NEW DELHI (Bloomberg) -- Qatar’s RasGas Co. has reached a new pricing agreement for an existing 25-year contract with Petronet LNG Ltd., India’s biggest gas importer that lowers the price of the fuel by almost half starting Jan. 1.

The pact will help Petronet reduce what it pays for RasGas supplies to $6 to $7 per million British thermal units from about $13, India’s Oil Minister Dharmendra Pradhan told reporters in New Delhi on Thursday. A penalty for taking less- than-contracted volumes this year amounting to about 120 billion rupees ($1.8 billion) on Petronet has been waived by the Qatari company, he said.

Petronet also agreed to purchase an additional 1 million tons of liquefied natural gas annually from the RasGas through the remainder of the 25-year contract, ending in 2028.

New Delhi-based Petronet has taken about two-thirds of its contracted quantity from RasGas this year as gas users, including power plants and fertilizer makers, switched to cheaper supplies bought on the spot market.