Report: GAIL seeking LNG contract revision with Gazprom

Report: GAIL seeking LNG contract revision with Gazprom

India’s utility GAIL is reportedly looking to renegotiate its 20-year gas purchase agreement with Gazprom of Russia due to low spot prices and weak local demand.

Talks between the two companies will be focusing on postponing most deliveries agreed under the 2.5 million tons per year deal signed in 2012, Reuters reports, citing sources familiar with the matter.

According to the initial agreement, “LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals in India.”

However, prices of crude oil are on the rise while the gas price is expected to remain low due to new production capacities coming online in Australia and the United States.

In addition, GAIL is looking to delay the deliveries that were scheduled to begin in 2018 or 2019, and revise the oil-linked price, the report shows.

At current oil prices, GAIL would have to pay more than US$7 per mmBtu for LNG delivered by Gazprom, while spot cargoes are priced at $5 per mmBtu.

GAIL is looking to rearrange its LNG order book following a number of agreements signed between 2011 and 2013.

 

LNG World News Staff

Share this article

Follow LNG World News

Events>

<< Jun 2019 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

LNGgc London

LNGgc is a fantastic way of raising attendees’ company profile within this market and creating greater awareness of their brand…

read more >

LNG Pricing, Trading & Hedging Singapore

LNG Pricing, Trading & Hedging training program has been completed by hundreds of leading traders, analysts, risk managers…

read more >

LNG Pricing, Trading & Hedging Houston

LNG Pricing, Trading & Hedging training program has been completed by hundreds of leading traders, analysts, risk managers…

read more >

World Gas Series: Morocco Summit

Bringing together key players in the gas value chain in Morocco, the World Gas Series:

read more >