Qatar is pushing for increased sales of liquefied natural gas (LNG) to India where demand is expected to double by the end of the decade, Bloomberg reported on Tuesday.
Qatar is set to have high-level discussions with Gail India Ltd. and Indian Oil Corp. during India Energy Week in Goa, traders with knowledge of the matter told Bloomberg.
Additionally, according to officials aware of the development, Qatar will extend its long-term supply agreement with Petronet LNG Ltd., which is scheduled to expire in 2028, on Tuesday. According to them, the contract will be renewed for 7.5 million tons of LNG annually, with Qatar paying for shipping—a clause not present in the existing agreement.
According to the traders, rates below past agreements that Qatar has signed in the last few years are what Indian buyers are demanding.
The energy minister of Qatar, Saad Sherida Al-Kaabi, is expected to participate in talks for contracts that might span several decades.
There is pressure on India and Qatar to sign long-term agreements. With only about half sold so far, the Middle Eastern country’s massive gas expansion project, which will increase exports by roughly two-thirds through 2027, needs customers, according to BloombergNEF.
In the meantime, New Delhi hopes to increase imports to increase the proportion of natural gas in its energy mix from roughly 6.7 per cent at the end of 2023 to 15 per cent by 2030.
Its goal is to depend less on more noxious fossil fuels, like coal and oil. Indian companies prefer long-term contracts to lock in supplies at reasonable prices rather than relying on the unstable and occasionally exorbitant spot market.
Notably, India imported roughly 21 million tons of LNG in 2023 according to Bloomberg’s ship tracking data. Moreover, as new import terminals open, deliveries are anticipated to reach 40 million tons or more by 2030, according to the traders. However, they added, that might not be sufficient to meet the government’s gas target, particularly if domestic production is not up to par.
The Goa conference will also give room to other suppliers like Abu Dhabi National Oil Co. and Shell Plc to attempt closing deals with India, the traders told Bloomberg.
