Russia’s gas major Gazprom has delivered its first liquefied natural gas (LNG) supplies to India under a long-term deal.
The supplies were received at Petronet’s Dahej LNG terminal in Gujarat, according to the Press Trust of India (PTI).
The delivery is part of an amended contract between state-owned natural gas processing and distribution company Gas Authority of India (GAIL) and Gazprom.
Indian Oil Minister Dharmendra Pradhan noted that the government will import LNG worth an estimated $25bn from Russia over the 20-year contract period.
The supplies amounting to 3.4 trillion British thermal units (TBtu) of cargo arrived from Nigeria.
Pradhan was quoted by the news agency as saying: “First, we renegotiate the price of LNG from Qatar, then reworked Australian supplies and now gas from Russia under renegotiated terms have started to flow.”
“Four years back, we were importing LNG from only Qatar. Today, we are getting LNG from Australia, US and now Russia.”
India intends to diversify its import basket and increase the share of eco-friendly fuel in the energy basket from the existing 6.2% to 15%.
It will allow the country to reduce its dependence on fossil fuels.
The deal is termed as the cheapest LNG delivery, with a price of $7 per million British thermal unit.
GAIL renegotiated terms of the 20-year contract signed with Gazprom in 2012 to import 2.5 million tonnes (Mt) of LNG a year.
The negotiations included an enhanced price and volume structure of the contract.
The company has deferred the import of the agreed 2.5Mt until the fourth year, with reduced amounts agreed to be received in the first three years.
Under the new terms, the contract has been extended by three years and GAIL has agreed to import an additional 6Mt of LNG.
The pricing model has now been changed from nine-month linkage of Japanese customs-cleared crude to three months average of Brent.
