Gujarat asks Qatar for long-term gas supply at reduced price

New Delhi: The Government of Gujarat has made appeal to Qatar for long term gas supply to the State at affordable rate.

In a meeting held in capital New Delhi between union petroleum and natural gas minister of India Shri Dharmendra Pradhan and Qatar’s energy minister Saad Sherida al-Kaabi, Gujarat energy minister Saurabh Patel shared details of Gujarat based gas power plants and said Gujarat has 4,000 MW installed capacity power plants functional, including state govt owned 2500 mw gas power plants and private sector owned 1500 mw gas power plants. Even if these plants run at 70% of total capacity, they will require 3.5 mt gas.

Patel said total 18 lakh houses in Gujarat are supplied gas through pipelines.The state govt intends to raise this figure to 22-24 lakh. The country has total 24,000 mw installed capacity gas power plant, of which, Gujarat’s share is 21%.

Qatar is largest LNG supplied for India.

During the meeting, India pressed Qatar to lower price of gas supplied under long-term contract to reflect falling rates of the spot or current market, Oil Minister Dharmendra Pradhan said. Qatar supplies 8.5 million tonnes of liquefied natural annually to India at a price linked Brent crude oil. Landed price comes to $9-10 per million British thermal unit, while the same gas is available in spot market at half the rate.

After talks with visiting Qatari Energy Minister Saad Sherida Al-Kaabi, Pradhan said, “LNG contracts should reflect current market reality. All energy producers have to revisit this old practice (of pricing LNG linked to oil) and come to new methodology reflecting demand-supply.”

India has in the past used its status as Asia’s third-largest LNG buyer to renegotiate deals with Qatar, Australia, and Russia. In 2015, it renegotiated the price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping in saving Rs 8,000 crore.

In 2017, it got ExxonMobil Corp to lower the price of Gorgon LNG and a year later convinced Gazprom to lower rates also.

(With inputs from an agency)