India’s biggest gas importer, Petronet LNG has successfully renegotiated a deal to buy liquefied natural gas (LNG) from Qatar’s Rasgas at a reduced price allowing the company to save about $605m a year in total, reported Reuters. The overall LNG supply will amount to $6-7 per million British thermal units (mmBtu) as of January 2016, far below the original figure of $12-13 per mmbtu agreed for earlier periods, said Indian Oil Minister, Dharmendra Pradhan.

According to Trade Arabia, the Qatari side also waived off a $1.5b penalty against Petronet for lifting less gas than agreed. The explanation for the renegotiated terms were the decline in oil and gas prices globally, coupled with skillful diplomacy on the part of Indian Prime Minister, Narendra Modi.

Petronet had signed a 25-year contract with the Qatari supplier in 2004 to purchase 7.5m tons of LNG annually, but began to substitute with cheaper spot shipments, which made Petronet liable for a penalty.