Qatar, the largest source of liquefied natural gas (LNG) for India currently, is not too keen to renegotiate the pricing of its long-term supply contract with India, Qatari Energy Minister Saad Sherida al-Kaabi said on Monday.
Al-Kaabi, who also serves as chief executive at Qatar Petroleum, is on a visit to India, where India's Minister of Petroleum, Dharmendra Pradhan, said earlier on Monday that his country would like to renegotiate the prices in its long-term supply contract with Qatar.
The two ministers "explored ways to make LNG more affordable for a price sensitive market like India, especially in our long-term contact," Pradhan said on Twitter after a meeting with the Qatari minister.
"Qatar is our largest source of LNG. India's appetite for energy, particularly gas is increasing considerably. We see an enormous potential to further expand India-Qatar energy ties and also expect to increase our bilateral engagements beyond buyer-seller relationship," the Indian minister added.
India currently imports around 8.5 million tons of LNG from Qatar under long-term supply deals, according to Reuters estimates.
But spot LNG prices for the fuel delivered at Indian ports are currently around half the price compared to that in the long-term supply contracts. So Qatar's LNG prices under long-term supply contracts are now much less appealing to India, which has set a goal to more than double the share of natural gas in its energy mix by 2030.
"The surge in India's energy requirements will not be incremental but exponential. India is rapidly expanding its gas infrastructure to cater to the needs of nearly 70% of our population. An estimated investment of $60 billion is lined up in building the gas infrastructure," Pradhan said today.
Last month, the minister said that India would surpass China to become the world's largest energy growth driver by 2030. India aims to move to a gas-based economy and looks to invest around $100 billion in energy infrastructure, including renewables, he said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More