Industry Trend Analysis - Petronet No Bellwether For Asian LNG - NOV 2017

BMI View : India is a unique position to drive down existing LNG contract prices, given the large size its domestic market, the price-sensitivity of its buyers and the low level of contracts in place. Other key Asian buyers will focus renegotiations on flexibility, rather than price.

India's Petronet has renegotiated a long-term LNG contract with ExxonMobil for deliveries from the Gorgon LNG project in Australia. The contract, which began in 2016, covers a 20-year period and was initially for a volume of 1.5mn tonnes per annum (mtpa). Reports indicate that the 1.5mtpa will now be priced at a 13.0-13.5% slope to crude, down from 14.5% previously. In return, Petronet will import an added 1.0mtpa, priced at a slope of 12.5%. Shipping freight costs will be covered by Exxon.

Petronet Leveraging Its Power

Glut Favouring Buyers
Global Cumulative Liquefaction Capacity Additions, mtpa
Source: BMI

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