NEW DELHI (Reuters) - India’s Petronet LNG Ltd said on Monday its talks to invest in Qatar’s exploration and production sector had “slowed down,” as the company had not been able to reach an agreement on pricing with the Middle Eastern nation.
“Qatar is still at a very preliminary stage. We were actually looking at getting the molecule (gas) at the well head price. They want to sell it at market price,” said Prabhat Singh, managing director of Petronet LNG.
Petronet LNG, India’s biggest liquefied natural gas (LNG) importer, wanted to partner with ONGC Videsh Ltd (OVL), the overseas arm of India’s biggest explorer Oil and Natural Gas Corp Ltd, to pick up a stake in an upcoming exploration and LNG project in Qatar.
The project would have been Petronet’s maiden venture into the natural gas exploration and production business and overseas LNG terminals.
Under the initial non-exclusive agreement signed with QatarGas, Petronet LNG was to get access to QatarGas’s data rooms for evaluation of the project within a month’s time.
A non-exclusive agreement allows QatarGas to speak with other interested parties about the project in addition to Petronet.
The upstream project was to feed into a 23 million tonnes per annum LNG terminal.
“There is merit in the project and we are considering (it),” Singh said, adding that as Petronet would be investing in the project, it would have to make economic sense.
Qatar is looking at a potentially bigger participation by Indian firms, and wants an entire consortium of companies to come together and invest in the Gulf nation, Singh said.
Petronet currently runs a 15 million tonne per annum LNG regasification site at Dahej in the western state of Gujarat and a 5 million tonne refinery at Kochi in southern India.
Petronet LNG buys 8.5 million tonnes a year of LNG from Qatar under a long-term contract. It also buys additional volumes from Qatar under spot deals.
Several other Middle Eastern nations that are major oil and natural gas exporter to India, including Saudi Arabia, the United Arab Emirates and Iran, are looking closely at establishing long-term strategic partnerships in the southern Asian country.
Reporting by Promit Mukherjee and Nidhi Verma; Editing by Mark Potter