Via the Financial Post:
India has renegotiated the pricing of liquefied natural gas (LNG) imported from Australia’s Gorgon project to save more than Rs 10,000 crore over the life of the contract. Exxon Mobil Corp has agreed to charge 13.9 per cent of the prevailing Brent oil price at the port of delivery rather than previously decided 14.5 per cent of the oil rate at the port of loading, a source privy to the development said. “Besides changing the indexation, LNG pricing will be on DES basis rather than FOB previously decided,” he added. Delivered ex ship (DES) is a trade term requiring the seller to deliver goods to a buyer at an agreed port of arrival. Under FOB, the buyer has to make shipping arrangement.
At $50 per barrel oil price, Gorgon LNG, whose supplies started in January this year, would have cost $7.25 per million British thermal unit at the port of loading. Adding another $1 for transportation would have led to delivered price of $8.25 in the old contract. In the new formula, Gorgon LNG delivered at Indian port will cost USD 6.95 per mmBtu. “Happy to share good news that India has, yet again, been able to address the long-term price issue of LNG from Gorgon to suit Indian market,” Oil Dharmendra Pradhan said in a tweet.
This is all a part of the LGN contractpocalypose that is moving forward at a good pace owing to the enormous glut in global LNG:
The irony being that Asian customers don’t need the gas that we’re sending them. Hence India will now enjoy Aussie gas at $8.70Gj while here it still costs $17.50Gj.
Let me just remind you of how crazy this is. As the last of the LNG megaprojects comes online, we’ll be exporting roughly 4200Pj of gas per annum and the east coast shortage is roughly 200Pj, 4% of exports.
Yes, a gas reservation mechanism covering just 4% of volumes would kill energy bills and restore the Australian decarbonisation project.
I am…lost for words.