India’s largest importer of liquefied natural gas, Petronet LNG is reportedly looking to cut the price of the chilled fuel to be loaded at the giant Chevron-operated Gorgon LNG project in Australia.
Petronet LNG, that has a 20-year deal in place to import 1.44 million tons per year, is looking to cut the price by 10 percent, Press Trust of India reports, citing a company official.
The deal was signed in 2009 with ExxonMobil, the owner of a 25 percent stake in the project, and the official said that due to the changes in pricing since then the LNG deals are being signed at a lower indexation.
Negotiations to alter the terms of the agreement have started, the official said.
Petronet has already reworked its 7.5 mtpa LNG import deal with RasGas, cutting the price significantly.
Under the current spot market conditions and with the oil price of US$50 per barrel, LNG from the Gorgon project would cost at around $7.25 per mmBtu with the current formula.
As the delivery is set for the Kochi LNG terminal, added customs duty and shipping and regasification costs, bring the price up to $9.5 per mmBtu.
LNG World News Staff