New Delhi: Petronat’s renewal of 7.5 million tonnes per annum liquefied natural gas (LNG) purchase contract from Qatar for 20 years from 2029 is possibly the largest deal to purchase this fuel in the world. This will help India achieve clean energy goals. The officials have said this. Top Petronat officials said the original 25-year agreement was signed in 1999 and supplies began in 2004.
Since then, Qatar has never defaulted on a single consignment nor has it imposed any penalty under the ‘buy or pay’ provision for the Indian company not taking supplies when prices were very high. The supplies under the extended contract will commence after Petronet takes delivery of 52 cargoes which it had failed to take in 2015-16 due to price surge.
Although the value of the contract has never changed, the price has changed four times. This also includes the latest case, in which there have been fresh negotiations on contract extension. Apart from this, the composition of the gas that was promised to be supplied has also changed. RasGas (now QatarEnergy) originally won the contract to supply rich gas containing ethane and propane, which is used at petrochemical complexes.
It has supplied 5 million tonnes (MT) of LNG per annum which includes methane (used for power generation, fertiliser, CNG or cooking fuel production) as well as ethane and propane gas. The price is lower under the revised contract signed last week. In this, Qatar Energy will supply lean or gas without ethane and propane. However, Petronet officials said Qatar will continue to supply rich gas until they have the facilities to use ethane and propane.