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GAIL renegotiating LNG deals with US companies

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LNG Industry,

Reuters are reporting that Indian gas company GAIL is renegotiating its LNG purchase deals with US-based Cheniere Energy and Dominion Cove Point.

GAIL has signed contracts for sourcing up to 5.8 million t of LNG from the US.

India wants to raise the share of natural gas in its energy mix to 15% in the next few years from about 6.5% now. But price-sensitive customers in the South Asian nation forced renegotiation of the price of two long-term LNG deals.

Pricing of US LNG is linked to a formula but other charges including freight to India add an extra US$2 – US$3 per million British thermal units, leading to GAIL scouting for destination, time and volume swap deals.

India has in the past renegotiated LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices have declined substantially amid a supply glut.

GAIL is looking to renegotiate LNG deals with Cheniere and Dominion Cove.

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