Prices were up for revision in January 2009
1-Jan-1970


PETRONET LNG, which has a 5-million-tonne regasification plant in Dahej, has secured two longterm deals from Rasgas of Qatar. While Petronet managed to seal the first contract at a fixed price of $2.79 for the first five years up to January 2009, the latest contract for 1.5 million tonnes has been finalised at prices close to current market rates. Although officials are tight-lipped about the price, sources in the know put the price at $8-9 per mmBtu.
 
New consumers would thus have to buy this LNG at almost double the price in the absence of pooling of prices. Petronet, which is the primary supplier of regasified LNG, pooled in all the gas and offered a revised price to its customers. However, the new policy has raised questions over contractual obligations under the gas supply agreement signed between the consumers and marketers of LNG. According to the agreement, prices were up for revision only in January 2009.
 
The new policy, however, comes as a boon for new customers like Ratnagiri Power, which is developing the Dabhol power project, because this would ensure gas at lower prices.
 
New consumers of LNG would get to buy gas at prices close to $6 per mmBtu compared to almost $9-10 per mmBtu, if they were to pay the price based on recent deals.
 
A large number of consumers from Gujarat in the power, fertiliser and industrial sectors, including GSPCL, GSFC, GNFC, Gujarat Power Company, along with Essar, went to court against this move challenging the decision to pool prices.


Source: The Economic Times, New Delhi, 3 August, 2007
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