Qatar will not be renegotiating any existing long-term liquefied natural gas (LNG) contracts with India, according to Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi.
He said this while speaking to reporters after a meeting with Minister of Petroleum and Natural Gas and Steel Dharmendra Pradhan.
Al-Kaabi’s comments came in response to queries from journalists on a possible renegotiation of long- term LNG supply contracts between India and Qatar. He said, “We do not renegotiate existing contracts. Contracts are contracts for the duration we sign them. And we as businesses understand that sanctity of contract is very important for both sides.”
India has been demanding a renegotiation of existing long-term LNG contracts with Qatar in view of the fall in prices in the spot market. India currently imports up to 8.5 million tonne of LNG per annum from Qatar under two contracts. India imported 21.7 million tonne of LNG during 2018-2019 from around the world.
Pradhan said, “We have put forward a 3-point presentation citing availability, accessibility, and affordability. The current formula of benchmarking gas prices with crude oil is not correct. Our long-term contracts are facing challenges. We have put forward our situation and analysis. India believes that there should be independent pricing formula for gas.”
He said that the price of natural gas should be delinked from the price of crude oil and independent benchmarks need to be developed. According to estimates, the current landed price of LNG from Qatar is $9-10 per million British thermal unit (mBtu) while gas is available at the spot market at around half this rate.
Al-Kaabi refused to disclosewhether Qatar sees any merit in Pradhan’s recent suggestions. He also maintained that the price of natural gas would vary between contracts.
India is looking at ways to make gas more affordable for domestic consumers, said Pradhan. In a statement after the meeting, Pradhan tweeted that the two also explored ways to make LNG more affordable for a price sensitive market like India, especially in long-term contacts.