India moving towards gas based economy as Petronet LNG saves foreign exchange of USD 2.5 Billion

By renegotiating long term gas purchase agreement with Qatar: PHD Chamber

President, PHD Chamber of Commerce and Industry, Dr. Mahesh Gupta has complimented the Petronet LNG and Ministry of Petroleum & Natural Gas for successfully renegotiating LNG prices with Ras Gas of Qatar and now making it available between $7-8 per mBtu from earlier level of US$ 12-13 per mBtu to Petronet LNG. Petronet LNG, India's biggest importer of liquefied natural gas (LNG), will be saving upto Rs.16,000 crore ($2.5 billion) in this renegotiation of a long term gas purchase agreement with Qatar.

Dr Gupta further said as the economy of the world is changing and in this regard the Petronet LNG made sure that India did not lose out in the changing dynamics. Petronet LNG's efforts are highly appreciable as we are moving towards a gas-based economy and for this, restructuring of the long-term contract with Qatar's RasGas was absolutely necessary.

With new LNG price regime in place, several gas fed industries in large sector including host of MSMEs in segments such as glass and ceramic will catapult for economic viability as the earlier price regime which was based upon long term pricing contract had virtually killed the sunrise sector of Indian economy with LNG price regime as high as that of US$ 12-13 per mBtu, pointed out Dr. Gupta.

In an SOS sent to the Ministry of Petroleum & Natural Gas, the President, PHD Chamber said, with the collapse of global oil and gas prices, the long term supplies agreement for procurement of LNG had become unviable with the contracted price at US$ 12-13 mmbtu vis-vis the spot LNG prices at US$ 7-8 per mmbtu.

The adept and adroit negotiating skills with which the Petronet LNG & Indian petroleum and natural gas authorities under the leadership of Mr. Pradhan handled the gas pricing issues with its supplier that is RasGas should be widely appreciated and adorned as industry, especially in its MSMEs segment that is dependent on LNG supplies to running its plants and machineries because the tumbled prices will enable such enterprises to run with margins that will keep them viable and profitable, said Dr. Gupta adding that the tweaked price formula under the revised agreement will also be equally gainful for suppliers of LNG in the emerging and evolving world's hydrocarbon scenario.

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