India and Qatar are expected to ink a long-term LNG agreement. According to Reuters, Qatar Energy may enter into a long-term LNG agreement with Indian purchasers.
The report’s sources state that the pact will provide more flexible and favorable conditions than current contracts.
Lower prices and destination-flexible cargoes are promised under the agreement, which is anticipated to be finalized by the end of this month or early February and last at least until 2050.
The agreement will give Indian purchasers access to 8.5 million metric tons per year (tpy) of LNG by extending contracts that are scheduled to expire in 2028.
This action is in line with the bold goal set by Indian Prime Minister Narendra Modi to increase the country’s natural gas consumption from the current 6.3% to 15% by 2030.
While sources suggest that the new contract intends to support India’s expanding demand for LNG and contribute to the country’s energy goals, neither Qatar Energy nor Indian firms have acknowledged the information.
In the face of growing competition from American suppliers, Qatar aims to increase its liquefaction capacity from 77 million to 126 million tpy by 2027. It also wants to play a bigger role in the Asian and European markets.
According to negotiations, the pricing structure might have a Brent slope of about 12% per million metric British thermal units (mmBtu).
The agreement is expected to be finalized during the next energy summit, which takes place in India from February 6–9.
Indian purchasers, including Petronet LNG, will have the freedom to select any receiving facility within India under the terms of the proposed agreement.
Although there is excitement regarding the possible transaction, the report’s sources advise against making any official pronouncements because they are not authorized to discuss the topic in public.
