Launceston, Australia — ExxonMobil’s deal to cut the price of liquefied natural gas (LNG) supplied under long-term contract to an Indian buyer has largely been viewed as a bad outcome for producers of the super-chilled fuel. Certainly, the trade made by Exxon to supply more LNG to Petronet LNG, but at a lower price, does seem to favour the Indian utility. Exxon will increase the volume supplied from its share of the Chevron-led Gorgon project in Western Australia by 1-million tonnes a year to about 2.5-million tonnes, but at a lower cost than originally agreed in 2009. The revised deal has sparked market speculation that this is the first domino to fall, and that more re-negotiations of long-term LNG contracts are likely. Up until now it has been extremely rare for these agreements to be amended, and so far, it has only been in India, where a deal with top LNG supplier Qatar was re-worked in 2015. Producers are probably nervous that major buyers in Japan, South Korea and China, whic...
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