Melbourne — India has won a big price cut on a 20-year liquefied natural gas (LNG) deal with global giant ExxonMobil in a rare contract renegotiation, a bad sign for global producers in a heavily oversupplied market. Long-term contracts are rarely revised in the LNG market, and for a big producer to cave in shows how supply from new plants in Australia and the United States over the past two years has transformed the market, analysts said. "This trend is overall a negative for sellers, as they are forced to provide more flexibility to buyers’ needs to maintain their markets," said Saul Kavonic, an analyst with energy consultants Wood Mackenzie. India has been aggressive in seeking cheaper deals, also renegotiating a contract with Qatar in 2015, but the real pain for producers would come if major Asian buyers in Japan, Korea and China followed suit. India’s oil minister, Dharmendra Pradhan, said on Saturday the country had been able to renegotiate a contract agreed to in 2009 for abo...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.