Refusing to give details of the supplier, he said the company was initially looking at buying 1 million tonnes of LNG under such a contract and would scale it up depending on the response from customers.
Petronet had in February sought bids from suppliers for 1 million tones of LNG per year for 10 years, starting 2024.
The company wanted 1 million tonnes per annum (Mtpa) of LNG on a delivered ex-ship (DES) basis.
The contract would be priced using a formula linked to both the US' Henry Hub natural gas futures, as well as the Dutch TTF gas futures, which is uncommon in India where most of the contracts are long-term and linked to crude oil prices.
Singh said some 13 suppliers showed interest but refused to name any of them.
Currently, Petronet buys close to 10 Mtpa of LNG through contracts with ExxonMobil and Qatar Petroleum. These contracts are priced at an average of benchmark crude oil rates of a particular period.
State gas utility GAIL India Ltd has contracted 5.8 million tonnes of LNG from the US benchmarked to prevailing rates on Henry Hub plus a fixed portion.
Petronet is now attempting to move away from these fixed benchmarks and get the gas on prevailing rates.
Going through prevailing rates, LNG priced on spot benchmarks will help bring down price of the fuel, which is used to generate electricity, produce fertiliser and run vehicles.
Singh said Petronet is continuing discussions with Qatar to lower the price of LNG under the long-term deal.
The flexibility sought by Petronet in the contract reflects the trend among other major importers, such as the Japanese. Amid collapsing LNG spot prices in Asia and high fixed contract prices, buyers are after shorter terms and more flexibility in relation to volumes and destinations with the latter allowing them to resale the cargoes.
Earlier in an investor call on fourth-quarter earnings, Petronet Director (Finance) Vinod Kumar Mishra said during the lockdown the company had issued force majeure notice on 9 LNG cargoes. These included 8 from Qatar and 1 from Australia.
Qatar and ExxonMobil have objected to its force majeure notices on LNG cargoes, he said, adding Petronet is on strong footing as contractual clauses are very clear and support its stand.
Petronet operates two LNG import terminals at Dahej in Gujarat and Kochi in Kerala.
Dahej terminal is running at 100 per cent after throughput fell to 60-65 per cent in April-May, he said, adding the import facility is expected to operate at full capacity for rest of the financial year.
The company plans to invest Rs 3,480 crore capex in FY21, including Rs 1,260 crore on small scale LNG business.
Singh said Petronet plans to set up 50 LNG dispensing stations along five highways in FY21 and expand it to 1,000 stations across India in later years.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)