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India to Save $1.4 Billion Under Renegotiated LNG Deal With Gazprom – Minister

© Sputnik / Maksim Blinov / Go to the photo bankThe stand with the Gazprom company's logo at the Sochi International Investment Forum 2016
The stand with the Gazprom company's logo at the Sochi International Investment Forum 2016 - Sputnik International
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Under the renegotiated contract, India will receive gas worth $25 billion in the next 20 years and nearly $1.5 billion worth of LNG will be bought from Russia every year.

New Delhi (Sputnik): India's renegotiated gas import deal with Russia's Gazprom is likely to save around $1.4 billion over the contract period ending in 2040, the minister of petroleum and natural gas, Dharmendra Pradhan, has claimed. In January this year, India's state-owned gas utility GAIL India had renegotiated the price agreed in 2012 with the Russian firm.

READ MORE: Russia Agrees to Lower LNG Prices for 20-Year Contract With India

"GAIL India Limited and Gazprom successfully re-negotiated the long-term LNG Sale and Purchase Agreement reflecting the current global gas market dynamics. The renegotiated price, compared to the earlier contract price, will result in savings of approximately $1.2 billion or INR 8500 crore (crude oil at US$ 50 per barrel) or $1.3 billion or INR 9000 crore (crude oil at US$ 60 per barrel) or $1.4 billion or INR 9500 crore (crude oil at US$ 70 per barrel) for the years 2018 to 2040," Pradhan informed the Parliament on Wednesday.  

Liquefied natural gas (LNG) plant construction in Yamal, Russia. - Sputnik International
India Receives First Russian Liquefied Natural Gas Shipment
Without giving specific details, Pradhan said the gas price was renegotiated based on many factors like project location, duration of contract and pricing formula.  

Earlier, the Narendra Modi-led government had successfully renegotiated the price of LNG with Qatar's RasGas and America's Exxon Mobil Corp. GAIL has also renegotiated a contract to buy about 5 million metric ton per annum of LNG from US firm Sabine Pass and Cove Point LNG Terminals that would save around $600 million.

READ MORE: Russian LNG is Likely to See Opportunity in China Amid Gas Shortage — Analysts

 As per the official record of the Indian government, the country has four operational LNG import terminals at Dahej, Hazira, Dabhol and Kochi, with a total LNG import capacity of 27.5 million metric tons.

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