GAIL India wants Petronet LNG to renegotiate the pricing agreement it signed for importing LNG from Australia’s Gorgon project.
Petronet LNG signed the agreement in August 2009
and under this, the company would import 1.44 million tonne per annum of liquefied natural gas (LNG) at a price equivalent to 14.5 per cent of ruling oil rates.
GAIL feels that the price of Gorgon LNG (which is to be delivered from second half of 2015) should be indexed to current market price.
GAIL, which is the promoter of Petronet LNG, feels that there is a strong case for renegotiation as international markets have changed since the signing of the deal in August 2009.
Current rates charged by LNG exporters were far less than Australian LNG, GAIL feels.
GAIL, Indian Oil, Bharat Petroleum and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent each in Petronet. Petronet is a private listed company but Oil Secretary is the Chairman of the company.
Petronet is to get Gorgon LNG in second half of 2015, with initial supplies of being about 0.48 million tonnes, ramping up to contracted 1.44 million tonnes in two years.
The price agreed with Gorgon translates into $14.5 per million British thermal unit price at $100 per barrel oil price.
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