India’s Petronet LNG to buy more Gorgon LNG from ExxonMobil

Image courtesy of Petronet LNG

India’s Petronet LNG has confirmed on Monday it is in talks to amend its existing deal for the LNG volumes it buys from ExxonMobil’s share of the giant Gorgon project in Western Australia.

Petronet signed a 20-year deal back in 2009 with ExxonMobil under which it agreed to buy around 1.5 million tonnes a year from the Gorgon LNG project on Barrow Island.

The company said in a stock exchange announcement on Monday it had been under “active discussions” with ExxonMobil regarding certain commercial aspects of the original Gorgon deal.

“The discussions continue in good faith and the parties have reached a broad understanding of terms,” Petronet LNG said without providing any additional info.

Reuters reported on Monday that, under the new deal, the company would increase its volumes from the Gorgon LNG project in Australia by an extra 1 million tonnes a year to about 2.5 million tonnes a year, at cheaper rates than initially agreed in 2009.

According to the news agency, Petronet would buy the LNG on delivered basis with a price equivalent to about 12.5 percent of Brent oil prices.

This move follows the announcement by India’s oil minister, Dharmendra Pradhan that the country has secured a price reduction on the existing Gorgon contract.

India has been pushing real hard in seeking cheaper deals, also renegotiating a contract with Qatar in 2015. State-run gas company GAIL (India) Ltd has also signed three time-swap deals with international players to sell some of its previously contracted U.S. LNG supplies as it is trying to reduce costs for price-sensitive Indian customers.

 

LNG World News Staff

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