India’s biggest state owned gas importer Petronet LNG has signed a revised contract with RasGas of Qatar to import gas at a significantly lower price than earlier. Under the new contract, Rasgas will supply Liquefied Natural Gas (LNG) to Petronet at 6-7 dollar per million British thermal units (mmBtu) from January 1, 2016. It would supply to 7.5 million tonnes of LNG India until the long-term contract ending in April 2028 The new rate is sharply lower than 12-13 dollar per mmbtu agreed earlier and has been  revised after falling global prices of oil and gas, saving  consumers around Rs.4,000 crore.

The Qatari supplier has also waived off a $1.5 billion penalty against Petronet for lifting less gas than agreed.

Petronet has a 25-year contract with Rasgas to annually buy 7.5 million tonnes of LNG. But it has reduced purchases by about a third this year due to high prices, substituting costly supplies from Qatar with cheaper spot shipments.

The fall in purchases, bigger than permitted under the original 2004 contract, made Petronet liable for the penalty.

ABOUT RASGAS

RasGas Company Limited is a liquefied natural gas (LNG) producing company in Qatar. It is the second-biggest LNG producer in Qatar after Qatargas. RasGas operates seven LNG trains located in Ras Laffan Industrial City.

RasGas also operates helium plants which produce 25% of the world’s helium, and make Qatar the second largest helium exporter.

RasGas was established in 2001. The chief executive officer of the company is Hamad Rashid al Mohannadi.