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Cheapest LNG Procurement Deal with Iran on Cards, Strategic Measures to Optimise the Cost

News

State-run gas utility GAIL India Ltd has begun talks with Iran to revive a decade-old $22- billion LNG supply contract, the cheapest deal ever struck by an Indian firm. 

Source:  ET

SNP Insights

Global Oil & Gas prices going down with supply glut, low demand & hence spot prices for LNG has become significantly more attractive than long term LNG agreement for India. At this situation, striking an agreement at attractive rate holds significant importance for country like India whose energy need is bound to go upwards in coming years. Yet considering the dynamism in the spot market price, there should be considerable scope for flexibility range in terms of percentage variation of contracted quantum of LNG can be procured annually in order to optimise the cost of LNG, at time of global slump & high.

Source: SNP Infra Research