Petronet tries to renegotiate Gorgon LNG price

Indian firm Petronet, New Delhi, is reportedly in talks with ExxonMobil Corp. to renegotiate the price of LNG it signed for from the Gorgon-Jansz project on Barrow Island offshore Western Australia.

The original 20-year contract was signed in 2009 between the two companies for 1.4 million tonnes/year of LNG.

The talks follow Petronet’s successful renegotiation of the price of an LNG contract with Qatar’s RasGas in December 2015 on the back of low global LNG prices.

The revised Qatar contract uses a 3-month average figure for Brent crude instead of the original 5-year average of a basket of crude imported by Japan. Petronet sweetened the new deal with an undertaking to buy an additional 1 million tpy of Qatari LNG.

Petronet’s 2009 Gorgon-Jansz contract with ExxonMobil was also based on a Japanese crude basket.

Petronet is an Indian government-initiated joint venture of GAIL (India) Ltd., Oil & Natural Gas Corp., Indian Oil Corp. Ltd., and Bharat Petroleum Corp. established to import LNG and build receiving and gasification terminals in the country.

The first terminal was set up at Dahej, Gujarat; the second at Kochi, Kerala. A third is under construction at Gangawaram, Andhra Pradesh.

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