India’s Petronet gets cheaper LNG from Qatar in landmark new supply deal

Qatar agreed to reduce liquefied natural gas prices in a long-term contract with Indian company Petronet LNG Ltd., part of a wider effort by the Gulf producer to lock-in customers for its massive output expansion.

Petronet on Tuesday renewed a contract to buy 7.5 million tons of LNG annually from Qatar from 2028 for 20 years in one of the largest ever deals for the super-chilled fuel. The country has so far found buyers for just about half of its new supply and needs to tie down others to long-term deals.

The new contract is at about a 12.2 percent link to Brent oil with a fixed charge of roughly 30 cents per million British thermal units, said traders who asked not to be named as the terms are private.

That’s less than the current agreement, which expires in 2028, and is at a 12.67 percent link to Brent with a 52 cent fixed charge.

State-owned QatarEnergy didn’t immediately respond to a request for comment.

Qatar, the world’s third-biggest LNG exporter, has signed long-term deals with companies including Shell Plc, TotalEnergies SE, Eni SpA, and China’s Sinopec.

India’s LNG buyers are in talks with suppliers from Oman and the UAE, and are demanding long-term deals at a low-12 percent link to Brent, the traders said. India is one of the fastest growing LNG markets, with demand expected to double by the end of the decade.