India strikes a better deal on LNG price with Exxon: Dharmendra Pradhan

India has renegotiated the pricing of liquefied natural gas (LNG) imported from Australia's Gorgon project to make the imported fuel affordable to price-sensitive domestic customers, oil minister Dharmendra Pradhan said on Saturday.

India has been trying to leverage its position as one of the biggest energy consumers to strike better bargains for its companies. In 2015 it renegotiated the LNG pricing formula with Qatar's Rasgas to buy the gas at half the original price.

"Indian customers will receive (Gorgon) LNG volumes at an amicable price soon. This is done in a similar way to what we did with LNG from Qatar," Pradhan said in a tweet.

India's top gas importer Petronet LNG signed a deal in 2009 with Exxon Mobil Corp to buy 1.5 million tonnes of LNG annually from Gorgon for 20 years. At that time Petronet agreed to buy LNG at a cost equivalent to 14.5 percent of the oil price and to pay for the shipping freight as well.

Supplies under the deal began from January 2017, with the landed price of gas costing about $11-$13 per million British thermal units (mmBtu), almost double that of Asian spot LNG prices.

The Gorgon gas prices are now linked to about 13-13.5 per cent of the global oil price on a delivered basis, two sources with knowledge of the negotiation said.
READ MORE

Exxon oil project in Guyana to cost $4.4 bn, will tap 450 mn barrels

Exxon Mobil Corp said on Friday it and partners would spend $4.4 billion to develop part of the Liza oilfield off the coast of Guyana, approving a megaproject at a time when the oil industry has grown obsessed with lower-cost shale.

Exxon's decision shows that oil companies remain interested in large projects, especially offshore, even in an era of belt-tightening after two years of low crude prices.

The Guyana announcement from Exxon and partners Hess Corp and CNOOC was the fifth deepwater project to gain approvals this year. BP Plc and Reliance Industries said on Thursday they would spend $6 billion to develop natural gas reserves off the Indian coast.

Exxon, which spent nearly $7 billion earlier this year to more than double its holdings in the Permian shale formation in the United States, said the Guyana project was approved in part due to its low cost of production.

"We're excited about the tremendous potential of the Liza field and accelerating first production through a phased development in this lower cost environment," Liam Mallon, Exxon's head of development, said in a statement.

Phase One of the Liza development project should tap about 450 million barrels of oil and pump about 120,000 barrels per day when it comes online in 2020, Exxon said in a statement.

The Liza field is roughly 190 kilometres off the coast of Guyana. Exxon plans 17 wells as part of the project's first phase. A second phase is possible in the future, the company said.

New York-based Hess said it expects its share of the project's cost to be about $955 million.

Shares of Exxon rose 0.7 percent to $82.97 on Friday.
READ MORE