Petronet LNG Ltd (PLL) has made it clear that the low offtake of long term LNG contracted with Qatar will continue in 2016-17 as spot prices will remain lower than long term contracts.
8The company has claimed that the LNG prices in the spot markets declined sharply due to the declining crude prices.
8However, the prices under the long-term contract, which have benefited the Indian consumers for the past decade, will take longer time to align with the current market prices due to the contract price being linked to the 60-month JCC average
8This has led to a decline in the RLNG off-take by the Petronet off-takers – GAIL, IOCL and BPCL – citing low acceptability of the RLNG prices among their consumers.
8This low off-take situation is expected to continue in the next year.
8Company is currently "urgently working" on plans to alleviate the situation but did not specify what kind of action will be taken. "Your Company is working to mitigate impact
of high priced LNG due to sharp decline of crude oil prices along-with off-takers GAIL, IOCL and BPCL," is all that PLL is willing admit for the time being.
8Clearly the floor price of Qatar LNG, aligned to the price of crude, has to be revised downwards for the price of long term contacts to come down and no indications are available from the company on whether the terms are being renegotiated.
8As per the terms of the agreement, PLL will have to account for take or pay arrangements as per the contract with Qatar but how exactly this is going to pan out is till not know. Clearly, PLL has to account for the outstanding payments under the take or pay head as contingent liability pending resolution of the tussle.
8During 2014-15, the Dahej Terminal handled 154 LNG cargoes and supplied 520.78 TBTUs of re-gasified LNG in India. As many as 2666 LNG road tankers were loaded and dispatched during the year.
For more details visit indianpetroplus.com
8The company has claimed that the LNG prices in the spot markets declined sharply due to the declining crude prices.
8However, the prices under the long-term contract, which have benefited the Indian consumers for the past decade, will take longer time to align with the current market prices due to the contract price being linked to the 60-month JCC average
8This has led to a decline in the RLNG off-take by the Petronet off-takers – GAIL, IOCL and BPCL – citing low acceptability of the RLNG prices among their consumers.
8This low off-take situation is expected to continue in the next year.
8Company is currently "urgently working" on plans to alleviate the situation but did not specify what kind of action will be taken. "Your Company is working to mitigate impact
of high priced LNG due to sharp decline of crude oil prices along-with off-takers GAIL, IOCL and BPCL," is all that PLL is willing admit for the time being.
8Clearly the floor price of Qatar LNG, aligned to the price of crude, has to be revised downwards for the price of long term contacts to come down and no indications are available from the company on whether the terms are being renegotiated.
8As per the terms of the agreement, PLL will have to account for take or pay arrangements as per the contract with Qatar but how exactly this is going to pan out is till not know. Clearly, PLL has to account for the outstanding payments under the take or pay head as contingent liability pending resolution of the tussle.
8During 2014-15, the Dahej Terminal handled 154 LNG cargoes and supplied 520.78 TBTUs of re-gasified LNG in India. As many as 2666 LNG road tankers were loaded and dispatched during the year.
For more details visit indianpetroplus.com
No comments:
Post a Comment