• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 9 hours IMO 2020 could create fierce competition for scarce water resources
  • 4 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 21 hours India After Elections: Economy And Hindu Are The First Modi’s Challenges
  • 7 mins Theresa May to Step Down
  • 19 hours IMO2020 To scrub or not to scrub
  • 8 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 8 hours Total nonsense in climate debate
  • 18 hours Devastating Sanctions: Iran and Venezuela hurting
  • 10 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 22 hours Old - New Kim: Nuclear Negotiations With U. S. Will Never Resume Unless Washington Changes Its Position
  • 228 days Epic Fail as Solar Crashes and Wind Refuses to Blow
  • 20 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 16 hours Level-Headed Analysis of the Future of U.S. Shale Oil Industry

Exxon Lowers LNG Prices For India

LNG

Exxon has cut the price of LNG from the Gorgon project in Australia for India, signaling more hard times ahead for producers of the increasingly cheap fuel. Reuters reports that India’s Oil Minister Dharmendra Pradhan announced the renegotiation of the 2009 deal this weekend, noting that if that had failed, New Delhi may have opted out of the contract.

Long-term supply contracts for LNG are seldom renegotiated, but now spot prices for LNG are much lower than the long-term contract stipulated in contracts signed during the last oil boom and tied to the price of crude. One Wood Mackenzie analyst warned that more contract revisions could be on their way over the next two years as LNG on the spot market continues to trade low due to the global oversupply, even if oil-tied prices rise.

Under the contract with Exxon, Indian Petronet will receive 1.5 million tons of LNG from the Gorgon deposit annually at an “amicable price.” This means, RBC analyst Ben Wilson estimates, that Exxon will receive 15 percent less revenue per unit.

Now that India has set a precedent, other major buyers in Asia, which is the biggest market for LNG, may follow in its footsteps and LNG producers will be hard pressed to refuse to lower their prices.

The Asia Pacific as of 2016 received 53.6 percent of global LNG supply, the IGU World LNG Report said. The region imported 48.6 million tons of the fuel, with the combined share of China and India rising by 13 million tons. Although Japan remains the world’s largest LNG importer with a 32.3-percent share of the market, it looks like China and India will catch up fast as both economies turn to cleaner fuels to replace coal and crude oil.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News