India’s Petronet LNG (PLL) and QatarEnergy on Tuesday inked a long-term LNG Sale & Purchase Agreement (SPA) for the supply of around 7.5 million metric tons per annum (MMTPA) of LNG to India, for the period between 2028 to 2048.
The deal involves LNG imports of $78 billion by the PLL during the contract period. The agreement signed on the sidelines of India Energy Week here serves as an extension to the Indian company’s existing Sale and Purchase Agreement (SPA) signed back in July 1999, due to expire in 2028.
The renewal price is learnt to be lower than prices paid by PLL for current imports, implying savings to the tune of $6 billion over the contract period.
Similar to its earlier agreement, the LNG volumes under the new deal will also be offtaken by GAIL (India) Limited (60%), Indian Oil Corporation Limited (30%) and Bharat Petroleum corporation Limited (10%). The volumes will be supplied after regasificatiom primarily from Dahej Terminal on substantially back to back basis, the company said.
Commenting on the agreement, Akshay Kumar Singh, MD & CEO, Petronet LNG Limited said, “This agreement will provide energy security and ensure stable & reliable supply of clean energy and help India in its stride towards greater economic development.”
The deal between the two companies will ensure energy security of India and assured supplies of regasified LNG to major consuming sectors like fertilisers, CGD, and power, among others. It also gains significance as the country targets increasing the share of gas in the energy mix to 15% from the current 6% by 2030.
The company will had earlier said that it will be expanding the capacity of Dahej terminal to 22.5 million tonne by March next year. Additionally, it is also constructing two additional gas storage tanks likely to be completed by June this year.
Qatar plans to increase its liquefaction capacity to 126 million tonne per year by 2027, up from 77 million tonne per year. It also has agreements with Shell, TotalEnergies, and ENI for the same.