Thaindian News

New Delhi, April 2 (IANS) India is keen to increase gas and crude oil imports from Qatar and the two countries are hopeful of soon working out the prices of the new supplies, Petroleum and Natural Gas Minister S. Jaipal Reddy said Monday.

“In the years ahead, with our energy demands growing rapidly, we look to Qatar for larger quantities of not only LNG but crude oil and LPG as well,” Reddy said at an event organised to mark the fifteenth foundation day of Petronet LNG Ltd.

Reddy said India imported 5.6 million tonnes of oil from Qatar in 2010-11 and was willing to increase the import.

India also buys 7.5 million tonnes of Liquefied Natural Gas (LNG) from Qatar under a long-term contract.

Reddy held bilateral talks with Qatari Energy and Industry Minister Mohammed bin Saleh al Sada here and requested for additional supply of oil and gas.

India has been asking for an additional 5 million tonnes of LNG supply from Qatar, the world’s largest LNG producer with an annual production capacity of 77 million tonnes.

However, pricing remains the sticky point as Qatar has been demanding very high prices for the new supply.

Reddy said pricing of gas remained a challenge in India as it had to compete with cheaper fuels such as coal, especially in the power sector.

“On the pricing front, however, a major challenge is that for end consumers in India, gas has to compete with relatively cheaper fuels such as coal, especially in the power sector. Therefore, price fixation for gas, whether LNG from abroad or gas through trans-national pipelines, will have to be mindful of this reality,” Reddy said.

The minister expressed hope that the two countries would soon work out a realistic price mechanism for the new gas supply.

“I am sure that the ongoing pricing negotiations between RasGas, Qatar and Petronet LNG Ltd and other oil companies in India will soon reach fruition, to the satisfaction of both sides,” he said.