Qatar to Supply India with Additional LNG

Qatar has agreed to supply an additional 4 million tonnes of liquefied natural gas (LNG) to India by 2013 as the energy-deficient country expands its capacity to handle imports, Indian officials said.

Qatar, which already supplies 7.5 million tonnes a year, is likely to increase shipments by 300,000 tonnes this year with additional supplies rising gradually to 4 million tonnes by 2013, India's oil secretary, S. Sundareshan said.

The price at which the additional LNG will be supplied has not been decided yet, Sundareshan said on the sidelines of a gas conference.

Additional supplies would be imported at the Dahej terminal of Petronet LNG and the Dabhol terminal of GAIL India, which is likely to be commissioned later this year, he said.

Oil minister Murli Deora told the conference that India's capacity to handle imported LNG was likely to rise to 20 million tonnes a year by 2011/12, from about 13 million tonnes now.

On Sunday Qatar's oil minister, Abdullah al-Attiyah, said in New Delhi he hoped India's Petronet LNG and GAIL would finalise a deal with Qatar's RasGas in the next few weeks.

Sundareshan said the government was keen to introduce a uniform price for natural gas sold in the country, changing the current system in which state firms are forced to charge a low, state-set price, while private firms have different fixed prices.

"We have to move to a situation where irrespective of the source, domestic gas should be equitably priced in the country. The government is moving towards it and we hope to have a policy in place soon," he said.

India, which imports about 70 percent of the oil it consumes, is actively encouraging the use of natural gas to reduce dependence on costly imports of crude oil.

Domestic supply of natural gas has also risen significantly after Reliance Industries started pumping gas from its deep-sea fields last year.