(Bloomberg) -- Qatar is set to sell more liquefied natural gas to India, where imports of the super-chilled fuel are set to double by the end of the decade.
The Persian Gulf producer on Tuesday extended a long-term supply contract with Petronet LNG Ltd. for 20 years to 2048. The renewal is for 7.5 million tons a year and the supplier will cover shipping costs, a term not included in the current contract.
Qatar is also holding high-level talks in Goa with Gail India Ltd. and Indian Oil Corp., said traders with knowledge of the discussions.
“We are here to serve the market in India and we want to be part of the expansion of its economy,” Qatar Energy Minister Saad Sherida Al-Kaabi, who brokered the Petronet negotiations, said at India Energy Week. “We are talking to a lot of colleagues in Indian companies about new deals.”
Indian buyers are demanding rates that are below previous deals that Qatar has signed in the last few years, the traders said.
Qatar, one of the top exporters of LNG, and India are under pressure to sign long-term deals. The Middle Eastern nation's massive gas expansion project — which will lift exports by about two-thirds through 2027 — is in need of customers, with only about half sold so far, according to BloombergNEF.
More Imports
New Delhi, meanwhile, wants to lift the share of natural gas in its energy mix to 15% by 2030 from about 6.7% at the end of 2023. The move is aimed at reducing reliance on dirtier fossil fuels, such as coal and oil. Indian firms want long-term deals to lock-in supplies at affordable rates, as opposed to depending on the volatile and sometimes prohibitively expensive spot market.
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India imported about 21 million tons of LNG in 2023, according to ship-tracking data compiled by Bloomberg. Deliveries are expected to reach at least 40 million tons by 2030 as new import terminals start up, according to the traders. But that still may not be enough to achieve the government's gas target, especially if domestic production falters, they said.
Other suppliers, including Abu Dhabi National Oil Co. and Shell Plc, are also using the Goa conference to try and finalize long-term contracts with India, the traders said.
(Update with comment, contract details in third, fourth paragraphs)
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