India has deferred taking deliveries of at least 20 shiploads of expensive liquefied natural gas (LNG) from its main supplier Qatar and wants a rate cut matching the 60 per cent fall in international rates, as global gas prices slumped, reports Reuters.
Sources said that India has imported 30 per cent less liquefied natural gas (LNG) than it is supposed to under a long-term deal with Qatar as a slide in spot prices has cut demand from local buyers .
So far this year Petronet LNG has cut imports by 30 per cent, or up to 24 cargoes, under the deal. Petronet buys 7.5 million tonnes a year of LNG on a long-term from RasGas of Qatar on a 25 year contract, indexed to a moving average of crude oil price
The delayed cargoes amount to around 1.25 million tonnes of LNG, or about 17 percent of the 7.5 million tonnes India buys every year from RasGas.
"Price is an issue," the source said, adding that high price of LNG under the long-term contract has led to users in fertiliser and power industry finding it cheaper to use alternate fuels like naphtha and fuel oil.
Petronet, the Indian state entity that imports LNG, says it cannot sell gas to consumers at the current rates. The fertilisers and power sectors, for example, are turning to cheaper alternatives such as fuel oil and naphtha.