PETRONET STILL IN TALKS WITH RASGAS

Qatar Today - - BUSINESS > OIL & GAS -

Petronet LNG, In­dia's big­gest im­porter of the chilled fuel is still in ne­go­ti­a­tions with RasGas over a $1.5 bil­lion penalty fee af­ter breach­ing the 25-year sup­ply con­tract.

The com­pany is also look­ing to lower the cost of LNG as it cur­rently pays about $12-13/MMBtu for the fuel un­der a deal that started in 2004, com­pared with around $7-8/MMBtu for spot LNG. Petronet LNG negated lo­cal me­dia re­ports say­ing that the two com­pa­nies reached a deal to mod­ify the con­tract and avoid the penalty fee.

Petronet has re­duced pur­chases from RasGas by about a third in 2015 due to high prices and low de­mand from cus­tomers. How­ever, the com­pany is only al­lowed to cut its pur­chases by max­i­mum 10 per­cent un­der the 7.5 mtpa LNG deal. Petronet is now fac­ing a hefty fine of $1.5 bil­lion for tak­ing less LNG than agreed.

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