India has inked its largest-ever USD 78 billion deal to extend LNG imports from Qatar for another 20 years until 2048, at rates lower than current ones, potentially saving around USD 6 billion over the contract's lifespan.

Petronet LNG Ltd, India's top liquefied natural gas (LNG) importer, announced the agreement to extend the purchase of 7.5 million tonnes of gas annually for electricity production, fertilizer manufacturing, and CNG conversion, during the India Energy Week in Goa.

Sources revealed that the renewed deal offers significantly reduced prices compared to the existing contract. At current rates, India could save approximately USD 0.8 per million British thermal unit under the revised terms, translating to USD 6 billion in savings over the contract's duration.

The original deal with RasGas, now part of QatarEnergy, was signed in 1999, marking India's inaugural contract for importing gas in its liquid form via cryogenic ships. Supplies under the 25-year deal commenced in 2004 and were initially scheduled to end in 2008.

Hardeep Singh Puri, the Minister of Petroleum and Natural Gas, expressed optimism about the agreement's impact on India's energy self-sufficiency journey, particularly under Prime Minister Narendra Modi's leadership. India aims to transition into a gas-based economy by increasing the share of gas in its energy mix from 6% to 15% by 2030.

In addition to the Qatar deal, India has secured LNG agreements with Australia, the US, and Russia. Qatar, the world's second-largest LNG exporter, plans to expand its liquefaction capacity to 126 million tonnes per year by 2027, up from the current 77 million tonnes. The renewal of the contract with India holds significant importance for Qatar's expansion plans.

Petronet LNG currently imports 8.5 million tonnes of LNG per year from Qatar under two contracts. The first deal, scheduled to expire in 2028, has now been extended for an additional 20 years. The second contract for 1 million tonnes annually, initiated in 2015, will be negotiated separately.

The recent agreement reflects Qatar's commitment to serving the Indian market and contributing to the nation's economic growth and energy requirements. Under the new deal, LNG supplies will transition to a delivered (DES) basis from 2028 to 2048, offering further flexibility and potential cost savings for Indian buyers.