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GAIL India Limited and Gazprom successfully re-negotiated long-term LNG sale and purchase agreement

New Delhi: GAIL India Limited and Gazprom successfully re-negotiated the long-term LNG Sale and Purchase Agreement reflecting the current global gas market dynamics. The renegotiated price, compared to the earlier contract price, will result in saving of approximately 8500 crores (crude oil at the US $50 per barrel) or 9000 Crore (crude oil at US$60 per barrel) or 9500 crores (crude oil at US$70 per barrel) for the years 2018 to 2040. Import Price per unit of LNG under GMTS contract is very competitive and currently cheaper than other long-term LNG supplies being received by GAIL at any delivery port in India.  

Union Minister of Petroleum & Natural Gas, Dharmendra Pradhan has said that in order to promote gas usage and to increase use of cleaner fuel and making Liquefied Natural Gas (LNG) more affordable to end users in the industries, Government vide notification No. 6/2017-Customs, dated 2nd February, 2017 has reduced the basic customs duty on LNG from 5 per cent to 2.5 percent.  

In a written reply in Lok Sabha today, he said that LNG Cargo of Russian natural gas under the long-term contract between GAIL India Limited and Gazprom Marketing & Trading Singapore (GMTS) of Russia was received on 4th June 2018. The gas price is negotiated between parties depending on many factors like project location, duration of the contract, pricing formula, etc.

Following long-term LNG contracts have been signed by Central Public Sector Undertakings (PSUs) and its Joint Ventures (JVs) with various countries:

 

Sl. No.

Name of the Company

Supplier

LNG Quantity

(MMTPA)

1

Petronet LNG Limited

Ras Gas, Qatar

7.5

2

Petronet LNG Limited

Ras Gas, Qatar

1.0

3

Petronet LNG Limited

Mobil Australia Resources Company Pty. Ltd., Australia

1.44

4

GAIL

Gazprom

Marketing &

Trading Singapore Pte. Ltd. (GMTS), Russia

2.85

5

GAIL

Sabine Pass, USA

3.50

6

GAIL

Dominion Energy Cove Point

(DECP), USA

2.30

7

IOCL

Diamond Gas International Pte Ltd, USA

0.7

 

LNG is imported under open general license on the terms and conditions mutually agreed upon between the buyers and sellers. India has four operational LNG import terminals at Dahej, Hazira, Dabhol and Kochi with a total LNG import capacity of 27.5 MMT. After regasification, the imported LNG is distributed to industries and domestic consumers through existing trunk pipeline networks passing through various states.

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