Mr. Andrew Flower

GLG News by Mr. Andrew Flower, Principal

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Petronet and RasGas Implement Second Phase of their LNG Price Agreement

December 30, 2008

Analysis of:RasGas to revise LNG prices for India every month | www.reuters.com

The monthly revision in the LNG price in Petronet's contract with RasGas from January 2009 was agreed when the pricing arrangemnets were finalised in 2001 and will take place routinely. RasGas agreed to  five years of fixed prices ($2.53/MMBtu FOB Qatar) after start-up of deliveries in January 2004 followed by 5 years when the price will move to full oil price indexation. In January 2014, when fully indexed, the price of LNG FOB Qatar will be 12.65% of the oil price as measured by the Japanese Crude Cocktail (JCC). The move to full oil price indexation will be gradual. In January 2009, fifty nine sixtieths of the price will be fixed at $2.53/MMBtu and one sixtieth linked to the average JCC oil price for the previous 12 months. In February it will be fifty-eight sixtieths fixed and two sixtieth oil price linked and so on until January 2014 when it will be entirely oil linked.

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