Petronet LNG, India’s biggest importer of the chilled fuel is still in negotiations with RasGas of Qatar over a $1.5 billion penalty fee after breaching the 25-year supply contract.
The company is also looking to lower the cost of LNG as it currently pays about $12-$13/MMBtu for the fuel under a deal that started in 2004, compared with around $7-$8/MMBtu for spot LNG.
Petronet LNG negated local media reports saying that the two companies reached a deal to modify the contract and avoid the penalty fee.
“ We wish to state that Petronet and RasGas are in discussion of current issues under their agreement. However, no binding agreement has been executed to this effect, ” Petronet said in a filing to the stock exchange on Monday.
Petronet has reduced purchases from RasGas by about a third in 2015 due to high prices and low demand from customers.
However, the company is only allowed to cut its purchases by maximum 10 percent under the 7.5 mtpa LNG deal.
Petronet is now facing a hefty fine of $1.5 billion for taking less LNG than agreed.
Shares of Petronet LNG rose 6 percent to Rs 233.35 on the Bombay Stock Exchange on Monday.
1 Indian rupee = 0.015044 U.S. dollars
LNG World News Staff; Image: Petronet LNG