India will look at reviewing the pricing of its long-term liquefied natural gas (LNG) deals at an "appropriate time" due to a fall in spot prices, oil minister Dharmendra Pradhan said on Monday. "We will look at reviewing long-term LNG contracts," Pradhan said at a natural gas event in New Delhi.
The spot price of imported LNG into Japan, one of the world's biggest importers of the super-cooled fuel, has more than halved in the last year. This has led buyers in Japan and China to request delays in term cargoes, while many other countries are considering lifting lower term volumes, experts have said.
"Long-term contracts are supposed to be honoured. We will look at an appropriate time (to review). In the past also we had renegotiated the deals," Pradhan said. India's biggest gas importer Petronet LNG Ltd said earlier this month that it would consider renegotiating its long-term LNG supply deals if spot prices remained weak for a prolonged period.
"We have to be sensitive to the international market. If spot prices continue to be low for 2-3 years then you don't have much of a choice, and there would be a case to look at renegotiation," Prabhat Singh, Petronet's managing director, told the source.
Pradhan said India is investing up to 5 trillion rupees ($70 billion) to boost its natural gas sector, including city gas distribution projects, setting up LNG liquefaction facilities and natural gas exploration. Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country's overall energy mix to 15% by 2030 from the current 6.2%.
