Qatar will supply liquefied natural gas (LNG) to India for two more decades as Petronet LNG this week signed a deal with QatarEnergy to extend the purchase of 7.5 million tons per year of LNG till 2048.
The supplier, QatarEnergy, will also cover shipping costs, a term not included in the earlier contract.
The deal was signed at the India Energy Week summit in Goa that saw a slew of major announcements by oil and gas companies.
The agreement that is already in force, which was signed in July 1999, was slated to provide supplies until 2028. Under the fresh contract, LNG supplies will be “made on delivered” basis from 2028 till 2048, Petronet LNG said in a press release.
Petronet had until the end of 2023 to negotiate a renewal of the earlier agreement. The negotiations for the deal, however, were delayed and the talks spilled into 2024.
The new $78 billion deal, India’s biggest ever for LNG imports, has been signed at lower than existing rates, helping Petronet save $6 billion over 20 years, the Press Trust of India reported.
The existing long-term agreement between Petronet LNG and QatarEnergy today accounts for around 35% of India’s LNG imports.
This LNG sale and purchase agreement will ensure energy security of India and assure continued supplies of regasified LNG to major consuming sectors such as fertilizers, city gas distribution, refineries, petchem, power, and other industries, Petronet said.
“This agreement will provide energy security and ensure a stable and reliable supply of clean energy and help India in its stride towards greater economic development,” Akshay Kumar Singh, managing director and chief executive officer of Petronet LNG Ltd, said.
The long-term LNG purchase agreement with QatarEnergy will strengthen the existing relationship between both companies, he said.
Oil minister Hardeep Singh Puri, who was present at the signing event along with Qatari energy minister Saad Sherida Al-Kaabi, said the contract “will provide momentum to India’s journey towards energy self-sufficiency as India is transitioning into a gas-based economy by increasing the share of gas in the energy mix from 6% to 15% by 2030.”
Qatar eyes more deals
Qatar is also holding high-level talks with GAIL India Ltd and Indian Oil Corp. Ltd, Bloomberg reported, citing unidentified people aware of the discussions.
Al-Kaabi said Qatar wants to be part of the expansion of India’s economy.
Indian companies are pushing for cheaper deals than Qatar has signed in the past few years, the report said.
“We are talking to a lot of colleagues in Indian companies about new deals,” Al-Kaabi said.
Qatar, the world’s second-largest LNG exporter, is planning to expand its capacity from the current 77 million tons per year to 126 million tons per year by 2027.
Vedanta to invest $4 billion in oil and gas
Vedanta chairman Anil Agarwal, who met Prime Minister Narendra Modi on Tuesday as part of a CEO roundtable at the India Energy Week, announced plans to invest $4 billion over the next three years to double its oil and gas production capacity to 300,000 barrels of oil equivalent per day.
Referring to the deal to acquire Cairn Energy’s India unit, Agarwal said he has invested $20 billion in oil and gas and has plans to invest another $4 billion, The Economic Times reported.
Agarwal said Vedanta aims to help India cut energy imports and produce at least 50% of the energy the country consumes.
Essar Group to build green hydrogen plant
Essar Group will invest $3.6 billion to build one of the world’s largest low-carbon (blue hydrogen) plants and the world’s first green refinery, Prashant Ruia, director at Essar Capital, said at the India Energy Week event.
Ruia said the company will invest in setting up a 1-gigawatt green hydrogen project in Gujarat, and building an LNG and electric ecosystem to decarbonize long-haul heavy trucks as it charts a new phase of growth.
“Essar is charting its path to a resurgence by investing in ecosystems for sustainable growth in India and beyond,” Ruia said.
“As India emerges as the world’s fastest-growing and third-largest economy, Essar is dedicated to fulfilling climate commitments and promoting green growth,” he added.
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