India's 25-year contract for 7.5 million tons per year of Qatari LNG is creating problems for Indian end-users, given the high price that Petronet LNG has to pay RasGas under the rigid oil-indexed contract formula. Right now, the contract price is around $13.50 per million Btu on an f.o.b. basis, nearly double the price of spot cargoes into India, which have tumbled due to a gluf of supply, the prospect of Japanese nuclear restarts, and weak demand across the region, particularly China (WGI Feb. 11' 15). Even if Brent oil prices remain between $50 and $70 per barrel, the Qatari LNG price wouldn't fall below $10/ MMBtu before mid-2017, according to Mumbai-based Antique Stock Broking.
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