Gas talks with Qatar bogged down over price: report

While India has sought an additional three to four million tonnes of liquefied natural gas (LNG) a year from Qatar (See: India, Qatar to increase cooperation in oil and gas sector) talks in this regard have got bogged down over the pricing of the fuel, according to a PTI report.

Petronet LNG Ltd, which at present imports 7.5 million tonnes a year of LNG from Qatar under a long-term contract, sought an additional two to three million tonnes, while state gas utility GAIL India wanted one million tonnes for 20-25 years.

The world's largest LNG exporter is ready to supply all of this, but wants a price of $16 per million British thermal unit, sources privy to the negotiations held during the visit of Qatar's Energy Minister Mohammed bin Saleh Al-Sada to Delhi told the news agency. Qatar sought a price of 15-16 per cent of Japanese crude cocktail - the average price of customs-cleared crude oil imports into Japan, while New Delhi was willing to pay no more than 14.5 per cent of the JCC. At present, this is less than $105 per barrel.

Sources said India was willing to pay a price equivalent to what it is paying Exxon Mobil Corp for buying 1.5 million tonnes a year of LNG under long-term contract from the Australian Gorgon project. RasGas of Qatar now supplies 7.5 million tons a year of LNG under long-term contract at a price indexed at 12.67 per cent of JCC.

Qatar, the report said, has been asked to make a final offer.

Besides offering additional LNG, the visiting Qatari Minister also offered to supply LPG and crude oil condensates which can be processed to produce white fuels like petrol, kerosene, ATF and naphtha.