India to renegotiate LNG rate with US, Russia

After getting Qatar and Australia to lower gas price, India is seeking to renegotiate rate of LNG it has contracted from the US and Russia to reflect current market realities, GAIL Chairman and MD B C Tripathi said Wednesday. "We have successfully renegotiated, along with Petronet LNG Ltd, two long-term (LNG import) contracts. We are now working on third and fourth contract," he said at a Ficci (Federation of Indian Chambers of Commerce and Industry) conference here.

While Tripathi did not name the contracts, he was referring to last month's inprinciple agreement with Exxon Mobil Corp for a cut in price of 1.44 million tonnes a year liquefied natural gas (LNG) to be imported from Australia's Gorgon project. In 2015, India renegotiated price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping save Rs 8,000 crore. "This is how market structure has changed," Tripathi said.

"The point which I am trying to drive is that we are moving from a supply constraint market to a supply surplus market." Tripathi said market structure has changed from a time when Indian firms struggled to get an appointment with LNG exporters to gas suppliers now running after the world's fastest growing energy market. This has primarily happened because availability has increased.

Last month, there was in-principle agreement with Exxon Mobil for a cut in price of 1.44 mn ton a year LNG to be imported from Australia