Petronet LNG under government investigation over gas purchase deals

Petronet LNG under government investigation over gas purchase deals

New Delhi: Natural gas importer Petronet LNG is being investigated by the Indian government over alleged irregularities in gas purchase contracts.

The complaints refer to the state-run liquefied natural gas (LNG) receiving and regasification company’s contracts to import 7.5m tonnes per annum (tpa) from Qatar’s Ras Laffan Gas Co, and 1.44m tpa from ExxonMobil’s Gorgon project in Australia.

In the case of the Gorgon project, a finger has been pointed at Petronet LNG over its failure to sign a back-to-back contract with India’s largest power utility NTPC for offtake of the gas. In the RasGas case, lean gas was accepted from the supplier instead of the contracted rich gas which has more recoverable hydrocarbons.

“A committee has been constituted by the government to enquire into the alleged irregularities, and the findings of the committee are under examination, in consultation with the Central Vigilance Commission,” Petroleum and natural gas minister Dharmendra Pradhan said, in a written statement to the Lok Sabha, the country’s Lower House of Parliament.

The investigation comes against the backdrop of India struggling to meet its ambitious targets for energy security. The country continues to import around 77% of its energy requirements, and is saddled each year with an energy import bill of $150bn. With gas consumption of 51bn cu m (bcm), India is the world’s fourth largest LNG importer by sourcing 18 bcm of the gas.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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