New Delhi: Qatar has agreed to lower the price of gas it sells to India on a long-term contract by about $6 billion (Rs 39,858 crore) to reflect the slump in global energy rates and also waived the Rs 12,000-crore penalty for 'short-lifting' in 2015.
Petronet LNG Ltd (PLL), India's biggest gas importer, on Thursday signed a revised contract with RasGas of Qatar.
The price as per the revised formula will come to $6-7 per million British thermal unit as against $12-13 per mmBtu currently, oil minister Dharmendra Pradhan said.
Pradhan said the reworked formula will apply to 7.5 million tonnes a year of LNG India buys from RasGas on a long-term contract ending in April 2028.
Read Also: Gas price cut by 8% to $4.66 /Unit
The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that PLL buys an additional 1 million tonnes of LNG annually.
The trailing three-month average Brent price is about $44 a barrel while the average of Japan Crude Cocktail for the five-year period ended September 30 was $94.
Pradhan said Qatar will also not seek Rs 12,000 crore from PLL for 'under-lifting' LNG from RasGas by 32%.
The value of the under-lifted cargoes in 2015 is Rs 12,000 crore and if the change-to-price formula was implemented, it would suggest a $2.5 billion (Rs 16607.5 crore) buyer saving over three years.
