Petronet, India’s largest gas importer, said on Wednesday the company would seek more volume and a better price from Qatargas during negotiations to extend a long-term LNG purchase agreement beyond 2028.
Petronet and Qatargas should negotiate an extension of the existing agreement to purchase 7.5 million tons per year before the end of 2023.
India suffers from an energy crisis
India is grappling with its worst energy crisis in five years, and Asia’s third-largest economy is suffering its worst electricity shortage since March 2016 due to an acute coal shortage amid rising global energy prices.
On the other hand, India pledged at the United Nations Climate Change Conference, or what is known as COP26, to reach zero carbon emissions by 2070.
This will be done in stages: first, India will increase its non-fossil energy capacity to 500 gigawatts by 2030, and second, India will meet 50% of its energy needs from renewable energy sources by 2030.
Third, between now and 2030, India will reduce its expected total carbon emissions by one billion tons.
Fourth, by 2030, India will reduce the carbon intensity of its economy by 45%.
Fifthly, by 2070 India will achieve its goal of becoming carbon-neutral, and the five step will be an unprecedented step by India towards the climate change file.
Extension of the contract with Qatargas
“We are trying to extend the contract beyond 2028, we are making every effort to renegotiate and possibly extend the contract,” Chief Financial Officer Vinod Kumar Mishra told an analyst after Petronet announced its quarterly results.
He said that the contract extension will be based on the contracts Qatargas signed recently with China, Bangladesh and Pakistan, in which the price of gas is linked to a discount of 10.2 from the price of Brent crude.
India’s contract with Qatargas is based on a discount rate of 12.7% over the three-month average price of Brent crude.
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