Going by news reports for June, India appeared to be actively engaged in renegotiating its LNG contracts following its successful renegotiation of the contracts with Qatar’s Rasgas to reduce price below $5/mmbtu. Petronet was reported to be in talks with ExxonMobil to renegotiate pricing of its 20 year 1.4 mtpa contract signed in 2009 for Australian Gorgon LNG. The revised formula is expected to be based on the three month average of Brent price rather than a five year average of crude imported by Japan on condition that Petronet buys an additional volume of 1 mtpa annually. As per the old contract the price of gas would have been about $6.5/mmbtu at the receiving terminal. Easing gas prices will most likely improve the financial performance of gar importers and also pave the way for an increase in gas consumption. Revival of gas based power projects and growth in fertiliser output from gas based plants were signs of the industry resuming or increasing gas consumption.
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