Minister: India to save up to $1.4 billion on renegotiated Gazprom LNG deal

India could save up to 95 billion rupees ($1.39 billion) as part of the renegotiated long-term liquefied natural gas (LNG) supply deal with Russian gas giant, according to India’s minister of petroleum and natural gas, Dharmendra Pradhan.

The initial 20-year LNG deal that was signed in 2012 between Gazprom and state-owned GAIL was revised at the start of this year.

GAIL and Gazprom “successfully re-negotiated the long-term LNG sale and purchase agreement reflecting the current global gas market dynamics,” Pradhan said on Wednesday in a written reply in the Rajya Sabha, the upper house of the Parliament of India.

“The renegotiated price, compared to earlier contract price, will result in saving of approximately Rs. 8500 Crore (crude oil at US$ 50 per barrel) or Rs. 9000 Crore (crude oil at US$ 60 per barrel) or Rs. 9500 Crore (crude oil at US$ 70 per barrel) for the years 2018 to 2040,” Pradhan said.

The minister added that that the LNG price was negotiated depending on many factors like project location, duration of contract and pricing formula.

To remind, Gazprom’s trading arm, Gazprom Marketing & Trading Singapore, delivered its first LNG cargo under the long-term contract to GAIL on June 4.

The cargo was delivered onboard the LNG Kano carrier to Petronet LNG’s Dahej terminal in Gujarat.

LNG World News Staff