India Calls for Shift from Oil-Based LNG Pricing

India's minister of petroleum and natural gas Dharmendra Pradhan said February 15 during an event in Delhi that there was a need to move away from the crude oil prices as the basis for determining LNG prices. 

"Global gas production and markets have witnessed significant restructuring during the last few years. Global supply of LNG is increasing at a rapid pace, and globally LNG prices are coming down significantly," Pradhan explained at an event in New Delhi. "It is time for our companies to take a relook at the term-contracts with major LNG suppliers. I also believe that the time has come for changing the pricing formulae for purchase of LNG by India."

India is the world’s fourth-largest LNG importer in the world, and its needs are set to rise as the government pushes to expand the role of gas in its economy.

Pradhan said that the biggest game-changer to bring about greater environmental sustainability and flexibility in India’s energy system would be through rapid deployment of gas. “It would serve as a transition fuel in our country. Our government is working towards increasing the share of gas from 6.2% to 15% in the energy mix by 2030,” he said.  

Pradhan said India was preparing to invest $60bn in its gas sector. “We are actively encouraging the use of LNG, among others, for long-haul trucking along expressways, industrial corridors and inside mining areas, marine applications.  We are also making natural gas easily available at doorsteps for users through mobile dispensing,” he added.