Petronet LNG Ltd, India’s leading natural gas importer, is expecting to sign an agreement with Qatar to extend its liquefied natural gas (LNG) supply deal beyond 2028. The development was recently revealed by India’s Oil Secretary, Pankaj Jain.
The pivotal deal will secure a sustained and reliable source of LNG for India beyond 2028, marking a significant development in the country’s energy landscape.
Jain confirmed on Wednesday that Petronet LNG and Qatar are in the final stages of negotiations. He expressed confidence in the imminent signing of the agreement. The extension would ensure the continuation of a longstanding partnership between the two nations, fostering India’s energy security.
Under the current long-term agreement, Petronet LNG committed to importing 7.5 million metric tons of LNG annually from Qatar. The extension of this deal will reinforce India’s position in the energy market. Moreover, it aligns with the nation’s growing demand for natural gas.
Qatar’s strategic approach
Qatar, one of the world’s largest LNG exporters, has consistently favored entering into long-term agreements with its global clientele. The country had set a deadline until the end of 2023 for Indian customers to engage in negotiations regarding potential extensions or renewals of existing agreements beyond 2028. Petronet LNG, one of the major players, could benefit from Qatar’s commitment to ensuring a stable and extended supply.
Qatar’s proactive approach to securing long-term agreements has been evident in recent months. It has inked 27-year deals with prominent global entities, including China’s Sinopec and China National Petroleum Corporation (CNPC). Moreover, it recently secured agreements with European giants Shell, TotalEnergies, and Eni. These agreements solidify Qatar’s standing as a major player in the global LNG market. These European majors are also minority shareholders in various LNG production trains of the North Field expansion project.
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North Field expansion project
Qatar’s groundbreaking ceremony in October for the North Field expansion project, the world’s largest LNG endeavor, underlines the nation’s commitment to expanding its export capacity. Qatar is set to play a crucial role in meeting global LNG demand. Thus, it seeks to add 48 million tons per annum (mmtpa) to its production capabilities by 2027.
In July last year, Qatar’s Minister of State for Energy Affairs and the President and CEO of QatarEnergy, Saad Sherida Al-Kaabi, said, “40 percent of all the new LNG that will come to the market by 2029, when all our projects are up and running, is going to be from QatarEnergy.”
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