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India to Save $1.4 Billion Under Renegotiated LNG Deal With Gazprom – Minister

© Sputnik / Maksim Blinov / Go to the mediabankThe stand with the Gazprom company's logo at the Sochi International Investment Forum 2016
The stand with the Gazprom company's logo at the Sochi International Investment Forum 2016 - Sputnik International
Under the renegotiated contract, India will receive gas worth $25 billion in the next 20 years and nearly $1.5 billion worth of LNG will be bought from Russia every year.

New Delhi (Sputnik): India's renegotiated gas import deal with Russia's Gazprom is likely to save around $1.4 billion over the contract period ending in 2040, the minister of petroleum and natural gas, Dharmendra Pradhan, has claimed. In January this year, India's state-owned gas utility GAIL India had renegotiated the price agreed in 2012 with the Russian firm.

READ MORE: Russia Agrees to Lower LNG Prices for 20-Year Contract With India

"GAIL India Limited and Gazprom successfully re-negotiated the long-term LNG Sale and Purchase Agreement reflecting the current global gas market dynamics. The renegotiated price, compared to the earlier contract price, will result in savings of approximately $1.2 billion or INR 8500 crore (crude oil at US$ 50 per barrel) or $1.3 billion or INR 9000 crore (crude oil at US$ 60 per barrel) or $1.4 billion or INR 9500 crore (crude oil at US$ 70 per barrel) for the years 2018 to 2040," Pradhan informed the Parliament on Wednesday.  

Liquefied natural gas (LNG) plant construction in Yamal, Russia. - Sputnik International
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Without giving specific details, Pradhan said the gas price was renegotiated based on many factors like project location, duration of contract and pricing formula.  

Earlier, the Narendra Modi-led government had successfully renegotiated the price of LNG with Qatar's RasGas and America's Exxon Mobil Corp. GAIL has also renegotiated a contract to buy about 5 million metric ton per annum of LNG from US firm Sabine Pass and Cove Point LNG Terminals that would save around $600 million.

READ MORE: Russian LNG is Likely to See Opportunity in China Amid Gas Shortage — Analysts

 As per the official record of the Indian government, the country has four operational LNG import terminals at Dahej, Hazira, Dabhol and Kochi, with a total LNG import capacity of 27.5 million metric tons.

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