Petronet LNG is said to be considering the proposal to renegotiate the Sale Purchase Agreement for natural gas it decided to source from Gorgon in Australia.
GAIL India recently suggested Petronet to renegotiate the contract the latter entered into in August 2009 with Australia on grounds that the scenario changed worldwide since then.
RK Garg, Director (Finance) of Petronet confirmed receiving letter from GAIL in this regard and said the company was examining it internally.
Some reports indicate that several long-term LNG deals including Russian giant Gazprom’s agreement to sell gas into Europe have been renegotiated in recent past in view of slump in benchmark gas prices.
In 2009, Petronet LNG signed a 20-year deal to buy 1.44 million ton per annum of liquefied natural gas (LNG) at a price equivalent to 14.5 per cent of the ruling oil rates.
In the letter, GAIL pointed out that the circumstances under which the price provisions (at higher slope linked to Japanese crude) were agreed in the said agreement changed significantly and the same has long term implications for Petronet and the R-LNG off-takers viz GAIL, IOC and BPCL.
GAIL, Indian Oil, Bharat Petroleum and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent each in Petronet.
Petronet is to get Gorgon LNG in second half of 2015, with initial supplies of being about 0.48 million ton, ramping up to contracted 1.44 million tons in two years.
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