In a significant move towards enhancing India’s liquefied natural gas (LNG) infrastructure, QatarEnergy and Petronet LNG, India’s leading gas importer, have entered into a historic agreement.
Under this new pact, announced on Tuesday, QatarEnergy commits to supplying 7.5 million metric tons of LNG annually to Petronet LNG.
This supply chain is scheduled to commence in 2028 and extend over a 20-year period, ending in 2048.
This arrangement, which is notably the largest single deal between the two entities to date, is structured on a delivered ex-ship (DES) basis, ensuring the delivery of LNG directly to Petronet LNG.
The agreement marks a renewal of an existing contract set to expire in 2028, under which Petronet LNG has been importing an identical volume of LNG from Qatar, albeit on a free-on-board (FOB) basis.
The previous contract terms were linked to Brent crude oil futures prices, with specific pricing mechanisms in place, although the financial details of the new deal have not been disclosed.
Qatar, holding the position as the world’s second-largest LNG exporter, is strategically expanding its reach in key markets across Asia and Europe.
This is part of its broader aim to increase its liquefaction capacity from the current 77 million tons per year to 126 million tons by 2027, amidst growing competition, particularly from the United States, the global leader in LNG exports.
The LNG supplied under this renewed agreement will be distributed among major Indian energy corporations, including GAIL (India) Limited, Indian Oil Corporation Limited, and Bharat Petroleum Corporation Limited.
These entities will receive the regasified LNG in proportions of 60%, 30%, and 10% respectively, for further distribution to end-users.
The regasification process will take place at Petronet’s Dahej import terminal, reinforcing the terminal’s pivotal role in India’s gas supply chain.