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After a ‘cold’ start, India renews $78 bn Qatar gas deal with $6 bn savings

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India bets on Qatar again with 20-year LNG deal - Al-Monitor: Independent,  trusted coverage of the Middle East
  1. India has renewed a 1999 contract for shipping gas from Qatar for another 20 years, leading to estimated savings of $6 billion over the extended period.
  2. Petronet-LNG, India’s largest gas importer, and QatarEnergy signed the agreement to extend the contract, which expires in 2028, for importing 7.5 million tonnes of LNG annually for an estimated $78 billion.
  3. The contract with QatarEnergy accounts for 35% of India’s total gas imports, and India meets 40% of its gas needs through imports.
  4. Under the revised contract, the fixed charge has been scrapped, while the slope (per cent of current Brent crude futures rates) largely remains the same as before.
  5. QatarEnergy will now bear the shipping cost, delivering gas at the port designated by Petronet under a delivered basis (DES) arrangement, compared to the previous free on board (FOB) arrangement where the buyer arranged shipping.
  6. The renewed contract reflects India’s rising influence as a pivot of global energy demand growth, allowing Indian negotiators to drive a hard bargain.
  7. Negotiations coincided with strained bilateral ties after a Qatari court handed death sentences to eight former Indian Navy officials on spying charges for Israel, seen as Doha’s attempt to influence the negotiations.
  8. India took a tough stance during negotiations as Qatar sought buyers amid rising US supplies to Europe limiting its marketing options for expanded liquefaction capacity.
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