Petronet LNG to renegotiate Australia gas price

The Gorgon gas is expected between end-2016 and early 2017.

Petronet LNG Ltd. (PLL) could opt for renegotiation of the rates for purchasing gas under its contract with Exxon’s Gorgon project in Australia, reports a business daily.

The Australian contract was signed in 2009, when liquefied natural gas (LNG) sources were limited, resulting in higher prices. But now with the market dynamics changing, PLL will likely push for renegotiation, a senior PLL official told the financial newspaper.

The Gorgon gas is expected between end-2016 and early 2017.

This contract is with Mobil Australia Resource Company Pty Ltd for assured LNG supply of 1.4 million tonnes per year for 20 years. 

At the prevailing rates, once supplies begin from 2016-17, the delivered price to end consumers will be at least a dollar more, the PLL official said, adding that the dynamics of gas price keep changing. 

GAIL India Ltd., one of the promoters of PLL, has been pushing for the revision of the contract price in the context of the changing dynamics of the global LNG industry.