Petronet LNG and QatarEnergy ink historic long-term LNG supply agreement

Petronet LNG Limited (PLL), the leading LNG terminal operator in India, has announced the successful execution of a landmark LNG Sale & Purchase Agreement (LNG SPA) with QatarEnergy. This significant agreement, which extends an existing contract set to expire in 2028, ensures the purchase of approximately 7.5 million metric tons per annum (MMTPA) of LNG on a long-term basis, stretching from 2028 until 2048. Under the terms of the new SPA, the LNG will be delivered on a Delivered Ex-Ship (DES) basis, marking a continuation of the strategic energy partnership between India and Qatar.

This extension builds on an initial agreement signed on 31st July 1999, which also covered the supply of around 7.5 MMTPA of LNG. Similar to the 1999 agreement, the LNG volumes under the new SPA will be off-taken by GAIL (India) Limited (60%), Indian Oil Corporation Limited (30%), and Bharat Petroleum Corporation Limited (10%) after regasification, primarily from the Dahej Terminal of PLL, on a substantially back-to-back basis.

The renewal of the LNG SPA between PLL and QatarEnergy is poised to play a pivotal role in ensuring India’s energy security, providing a steady supply of regasified LNG to key sectors such as fertilizers, city gas distribution (CGD), refineries & petrochemicals, power, and other industries.

Akshay Kumar Singh, MD & CEO of Petronet LNG Limited, highlighted the critical importance of the agreement, noting that the existing long-term agreement with QatarEnergy accounts for around 35% of India’s LNG imports and holds national significance.

Akshay Kumar Singh also emphasized the agreement’s alignment with the vision of the Hon’ble Prime Minister of India to transition the country to a gas-based economy and increase the share of natural gas in India’s primary energy basket to 15% by 2030. This agreement is expected to bolster energy security and ensure a stable and reliable supply of clean energy, contributing significantly to India’s economic development goals.

The extension of the LNG SPA between Petronet LNG Limited and QatarEnergy is a strategic move that reinforces India’s commitment to enhancing its energy security and transitioning towards a more sustainable, gas-based economy. This agreement not only secures a significant portion of India’s LNG imports for the next two decades but also strengthens the bilateral relationship between India and Qatar in the energy sector. As India strives to meet its ambitious energy and environmental goals, such partnerships will be crucial in providing the stable and clean energy supply needed for sustained economic growth and development.