Qatar to sign ‘cheaper’ LNG deal with India shortly

REUTERS/Dado Ruvic

State-run Qatar Energy is expected to sign a long-term deal within weeks to provide liquefied natural gas (LNG) to Indian buyers on cheaper and more flexible terms than existing contracts, according to a news report.

The Indian companies and QatarEnergy have agreed on terms and a contract could be signed by the end of this month or early in February, Reuters reported, citing an unnamed source.

The contract offering destination-flexible cargoes and lower pricing will likely run until at least 2050, possibly longer.

The agreement will extend the contracts, which are set to expire in 2028, for supplying 8.5 million metric tonnes per year LNG to Indian buyers.

The Indian government aims to raise the share of natural gas in the country’s energy mix to 15 percent by 2030 from 6.3 percent at present.

The deal is likely to be finalised at a price of around a 12 percent slope of Brent per million metric British thermal unit, said one source. Another source put the range at 12-12.5 percent for supplies on a free-on-board basis for India.

The report said the deal could be signed during an energy conference in India from February 6-9.

S&P Global Ratings said last November that Qatar’s LNG production is projected to remain flat until 2025. However, it should increase by 30 percent over 2026-2027, as the country lifts its moratorium on further development at the North Field.

Qatar last year signed long-term deals with European majors Shell, TotalEnergies and Eni, as well as Chinese companies.