Qatar’s RasGas Company has delivered the inaugural LNG cargo to India’s Petronet LNG under its new 1m ton per annum (MTA) sales and purchase agreement (SPA), reported Trade Arabia. The cargo was carried by the Al Thumama (Q-Flex) vessel at Ras Laffan in Qatar and delivered to the Dahej LNG Terminal in India.
According to The Financial Express, state-run Petronet is India’s biggest importer of LNG and hopes to utilize its relationship with RasGas to begin selling cheaper gas to Indian consumers, currently using liquid fuels such as naptha and fuel oil, within three years.
The total annual long-term commitment between the two companies has reached 8.5 MTA. RasGas has been supplying LNG to India and Petronet since 2004. The new SPA, signed between the two companies in December 2015, involved the reworking of the older long-term contract, meant to reduce the original agreed on price.
The Economic Times wrote that the price of gas was expected to decline to $6 – $7 per million British thermal units from the original $12. With lower margins, Petronet LNG can compete more successfully with cheaper fuels available in the Indian market, benefiting both local power plants and fertilizer companies.