New Delhi : In a diplomatic victory, India has got Qatar to agree to slashing gas price by about half to match a slump in global energy rates, helping the nation save billions of dollars, as well as get waiver from Rs 12,000 crore liability for short-lifting of gas.

India, which got USD 15 billion of benefits during first 11 years of the term-contract with Qatar beginning 2003 by way of enjoying low gas prices when world energy rates were rising, will pay USD 6-7 per million British thermal unit for 7.5 million tons a year of LNG it buys from RasGas of Qatar.

This is against USD 12-13 per mmBtu rate India pays presently, Oil Minister Dharmendra Pradhan told reporters here.

Pradhan also said Qatar will also not seek Rs 12,000 crore from PLL for ‘under-lifting’ LNG from RasGas by 38 per cent. The value of the under-lifted cargoes in 2015 is Rs 12,000 crore and the new formula would suggest a USD 2.5 billion buyer saving over three years.

 “In the changed economic scenario worldwide where oil prices have slumped to multi-year lows and gas prices have fallen, India felt it should not suffer,” he said, adding Petronet LNG Ltd – the firm that buys gas from RasGas, has signed a revised agreement to reflect a pricing change.

The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that PLL buys an additional 1 million tonnes of LNG annually. The trailing three-month average Brent price is about USD 44 a barrel while the average of Japan Crude Cocktail for the 5-year period ended September 30 was USD 94. This is probably the first deal after slump in energy prices that Qatar agreed to reduce prices. PLL CEO and Managing Director Prabhat Singh said India is the best market available for Qatar as the net back price the exporter gets is better than selling gas to Europe or Japan.

“They get the best value here. This market if you lose, you lose it for ever,” he said explaining what went behind the renegotiation.

He said the fertilizer sector, which bought about one-third of the 7.5 million tons a year of liquefied natural gas (LNG) imported from Qatar, will save Rs 12-13 crore per day. “Savings from fertiliser sector alone will be about Rs 4,700 crore,” he said.

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