DOHA TALKS between Qatar and India over the price of liquefied natural gas (LNG) have reached a deadlock as the former is not ready to supply gas at a price agreeable to India, Indian Ambassador to Qatar HE Sanjiv Arora told Qatar Tribune.
“India has sought an additional 3-4 million tonnes of LNG a year from Qatar but talks are held up over pricing.
Petronet LNG, which imports 7.5 million tonnes a year of LNG from Qatar under a long-term contract, has sought an additional 2-3 million tonnes, while state gas utility GAIL India wanted one million tonnes for 20-25 years. Some private companies are also willing to import gas from Qatar,” Arora said.
Qatar is seeking 15-16 percent of the Japanese Crude Cocktail (JCC) as price, the average price of customs- cleared crude oil imports into Japan, while New Delhi is willing to pay no more than 14.5 percent of JCC.
India is willing to pay a price equivalent to what it is paying Exxon Mobil for buying 1.5 million tonnes of LNG under long-term contract from Australia’s Gorgon project. RasGas of Qatar now supplies 7.5 million tonnes of LNG under long-term contract at a price indexed at 12.67 percent of JCC.
Qatar, world’s largest LNG exporter, is ready to meet the requirement but wants a price of $16 per million British thermal unit, according to reports.
Qatar is of the view that global LNG demand had surged and prices have increased following the shutting down of nuclear power plants in Japan.
“It is for Qatar to make the final offer. LNG terminals in India are wellequipped to receive additional gas from Qatar. Petronet, which wants additional LNG at its Dahej terminal in Gujarat, has expanded to 15 million tonnes a year from current 10 million tonnes, as well as at the five million tonnes a year terminal at Kochi in Kerala,” Arora said.
GAIL wants LNG at its almost ready import facility adjacent to the Dabhol power plant in Maharashtra. To lure Qatar, New Delhi has also offered equity in petrochemical plants that Oil and Natural Gas Corp (ONGC) is putting at Dahej in Gujarat and Bharat Petroleum is planning at Kochi.
Mangalore Refinery and Petrochemical’s proposed chemcial complex has also offered for equity participation.