ID :
211581
Thu, 10/06/2011 - 13:53
Auther :
Shortlink :
https://www.oananews.org//node/211581
The shortlink copeid
Look into price changes in LNG contract from Qatar: MP to PM
New Delhi, Oct 6 (PTI) A member of Parliament has written
to the Indian Prime Minister to enquire into the changes made
in the contract for import of LNG from Qatar that will result
in gas users paying an astronomical USD 55.5 billion (Rs 2.5
lakh crore) more for the imported fuel from 2014.
Member of Parliament from western Indian state Gujarat
Mukesh B Gadhvi has written to Prime Minister Manmohan Singh,
drawing his attention to the changes made in contract Petronet
LNG Ltd had signed with RasGas of Qatar.
The contract was for buying 7.5 million tonnes a year of
natural gas in its liquid form (liquefied natural gas or LNG)
that resulted in gas price jumping from USD 3.04 a unit to USD
12.66 per mmBtu.
Stating that Rs 2.5 lakh crore was more than the number
floating in the case of 2G scam, Gadhvi said this happened
when Petroleum Secretary was the Chairman of Petronet and
chairman/directors of four leading oil PSUs were members of
the company board.
"Instead of protecting country's interests these
authorities have played a role in benefiting RasGas," he
added.
In response to a tender, RasGas had offered to sell LNG
at USD 2.53 per million British thermal unit at crude oil
price of USD 20 per barrel. The LNG price was to rise or fall
by 2 cents per mmBtu in tandem with every dollar movement in
the price of a barrel of crude. At USD 100 a barrel oil rate,
LNG price was to be USD 4.13 per mmBtu.
But strangely, an unsolicited offer pricing LNG in a band
of USD 16-24 per barrel oil price (USD 2.01 per mmBtu to USD
3.04 per mmBtu gas price) was accepted by Petronet.
Further, in 2003, Petronet renegotiated the price and
agreed to having a fixed price at USD 20 per barrel oil (USD
2.53 per mmBtu) for five years from 2004-2009 and indexation
with actual crude price, thereafter, he wrote.
This led to price going up by USD 1 per year for five
years from 2009, and from January 2014 it would be USD 12.66
per mmBtu at oil price of USD 100 per barrel.
Had Petronet not changed the contract, the price of LNG
from Qatar would have been USD 3.04 per mmBtu for 25 years.
But now, users will have to pay USD 12.66 per mmBtu for 15
years beginning 2014.
The extra to be paid will be USD 3.7 billion a year and
USD 55.5 billion (about Rs 2.5 lakh crore) for 15 years.
Gadhvi, a Member of the Parliamentary Standing Committee
on Petroleum and Natural Gas, had previously demanded that
joint ventures run by public sector firms like Petronet should
be brought under audit purview of CAG.
"The public is entitled to expect very high standard from
the Government," he wrote seeking an enquiry, possibly by CBI,
into the whole issue. PTI ANZ
MNS
to the Indian Prime Minister to enquire into the changes made
in the contract for import of LNG from Qatar that will result
in gas users paying an astronomical USD 55.5 billion (Rs 2.5
lakh crore) more for the imported fuel from 2014.
Member of Parliament from western Indian state Gujarat
Mukesh B Gadhvi has written to Prime Minister Manmohan Singh,
drawing his attention to the changes made in contract Petronet
LNG Ltd had signed with RasGas of Qatar.
The contract was for buying 7.5 million tonnes a year of
natural gas in its liquid form (liquefied natural gas or LNG)
that resulted in gas price jumping from USD 3.04 a unit to USD
12.66 per mmBtu.
Stating that Rs 2.5 lakh crore was more than the number
floating in the case of 2G scam, Gadhvi said this happened
when Petroleum Secretary was the Chairman of Petronet and
chairman/directors of four leading oil PSUs were members of
the company board.
"Instead of protecting country's interests these
authorities have played a role in benefiting RasGas," he
added.
In response to a tender, RasGas had offered to sell LNG
at USD 2.53 per million British thermal unit at crude oil
price of USD 20 per barrel. The LNG price was to rise or fall
by 2 cents per mmBtu in tandem with every dollar movement in
the price of a barrel of crude. At USD 100 a barrel oil rate,
LNG price was to be USD 4.13 per mmBtu.
But strangely, an unsolicited offer pricing LNG in a band
of USD 16-24 per barrel oil price (USD 2.01 per mmBtu to USD
3.04 per mmBtu gas price) was accepted by Petronet.
Further, in 2003, Petronet renegotiated the price and
agreed to having a fixed price at USD 20 per barrel oil (USD
2.53 per mmBtu) for five years from 2004-2009 and indexation
with actual crude price, thereafter, he wrote.
This led to price going up by USD 1 per year for five
years from 2009, and from January 2014 it would be USD 12.66
per mmBtu at oil price of USD 100 per barrel.
Had Petronet not changed the contract, the price of LNG
from Qatar would have been USD 3.04 per mmBtu for 25 years.
But now, users will have to pay USD 12.66 per mmBtu for 15
years beginning 2014.
The extra to be paid will be USD 3.7 billion a year and
USD 55.5 billion (about Rs 2.5 lakh crore) for 15 years.
Gadhvi, a Member of the Parliamentary Standing Committee
on Petroleum and Natural Gas, had previously demanded that
joint ventures run by public sector firms like Petronet should
be brought under audit purview of CAG.
"The public is entitled to expect very high standard from
the Government," he wrote seeking an enquiry, possibly by CBI,
into the whole issue. PTI ANZ
MNS
