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Qatar is pushed to reduce the LNG prices


  • Dharmendra Pradhan, has pushed for a reduction in liquefied natural gas (LNG) prices by Qatar, to be in sync with the decline in global rates over the past one year.
  • India buys 7.5 million tonnes a year of LNG on a long-term 25-year contract.
  • Qatar sells LNG at a price linked to the previous 12-month Japan Crude Cocktail (JCC), including caps and floors based on average JCC prices over the past 60 months.
  • The high price of LNG under the long-term contract has pushed users in the fertilizer and power industry in India to cheaper alternatives like naphtha and fuel.
  • The contract is a take-or-pay wherein the buyer has to take the contracted volume every calendar year or pay for it. But the contract also provides for a flexibility that gives the buyer the option to defer taking 10 per cent less of yearly supplies.
  • The contract also allows the buyer to seek 10 per cent more quantity over the contracted volume any year, with the excess volume being adjusted during the remaining duration of the contract.

Source: ET

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