India is reportedly looking to review prices of its long-term LNG contracts at an “appropriate time” due to a fall in spot prices.
According to Reuters, oil minister Dharmendra Pradhan said that long-term contracts were supposed to be honored.
The minister stated that India would review the deals at an appropriate time and reminded that the country renegotiated deals in the past as well.
Pradhan added that India was investing up to 5 trillion rupees ($70 billion) to boost its natural gas sector, including city gas distribution projects, setting up LNG liquefaction facilities and natural gas exploration.
It is worth noting that India’s Prime Minister Narendra Modi also set a target to raise the share of natural gas in the country’s overall energy mix to 15 percent by 2030 from the current 6.2 percent.
India’s biggest gas importer Petronet LNG Ltd said earlier this month that it would consider renegotiating its long-term LNG supply deals if spot prices remained weak for a prolonged period.
Prabhat Singh, Petronet’s managing director, told Reuters: “We have to be sensitive to the international market. If spot prices continue to be low for 2-3 years, then you don’t have much of a choice, and there would be a case to look at renegotiation.“