India's Petronet delays plan for 1mtp LNG deal amid high prices

FILE PHOTO: Illustration shows a model of an LNG tanker
·2 min read

By Nidhi Verma

NEW DELHI (Reuters) - India's top gas importer Petronet LNG has pushed back plans for a 1 million tonnes per annum (mtpa) liquefied natural gas (LNG) import deal after a surge in global prices, its head of finance Vinod Kumar Mishra said.

"If you go for any long term contract it comes at a very high slope, so we are waiting for some time because if prices come down then we can get good price...we are waiting for right environment," Mishra said during a call with analysts.

Petronet is currently negotiation with Qatar for extension of its 7.5 mtpa long term LNG deal to beyond 2028, he said.

The company has to complete renegotiation with Qatar for extension to the deal by end-2023, he said, adding Petronet could seek additional volumes from Qatar or some other player.

Petronet wants a 1 mtpa deal for small industrial users.

Petronet's managing director A.K. Singh in May said the company is looking for 0.75-1 million tonne of LNG in immediate term to meet the rising demand.

India's top gas distributor GAIL (India) Ltd on Thursday said it failed to award its recent tender seeking 0.75 mtpa LNG under a 10-year deal.

Mishra also said Petronet's Singapore-based unit has not yet started spot trading of LNG as prices are too high.

He said next year global LNG prices could ease after an end to Russia Ukraine crisis, a primary reason for a surge in global LNG prices.

Earlier in the day, Singh said higher global prices have curbed growth in India's gas demand, though he did not see higher gas prices affecting his company's prospects of renewing the Qatar gas deal as the Middle Eastern nation is expanding capacity.

He said the market will realign as more Russian supplies will come to Asia if European countries switch to the US and Qatar.

(Reporting by Nidhi Verma; Editing by Mike Harrison)