By Nidhi Verma
NEW DELHI, Jan 16 (Reuters) - Gas utility GAIL (India) Ltd GAIL.NS has renegotiated the terms of a long-term liquefied natural gas (LNG) purchase deal with Russia's Gazprom (MCX:GAZP), the Indian company said on Tuesday.
This is the third such negotiation by India to make the imported fuel more affordable to its price-sensitive customers.
India has been making the most of its position as one of the world's biggest energy consumers to strike better bargains for its companies.
In the past it had renegotiated LNG deals with Qatar's RasGas and Exxon Mobil Corp (NYSE:XOM) XOM.N , as spot prices declined substantially amid a supply glut. the re-worked deal, GAIL and Gazprom have extended the duration of the deal by two to three years and the Indian company has agreed to buy an additional six million tonnes of LNG volumes, a source familiar with the matter said.
The pricing of the super-cooled fuel has been changed from 9 month linkage to Japanese Customs cleared crude to three months average of Brent, the source said.
In the initial three year period GAIL will be buying fewer volumes -- 0.5 million tonnes in the first year, 0.75 million tonnes in the second year and 1.5 million tonnes in the third year.
"Remaining volumes of the first three year will be picked up in the subsequent years," this source said.
GAIL signed the deal with Gazprom Marketing & Trading Singapore in 2012 to buy 2.5 million tonnes of LNG per year for 20 years on a delivered basis. The supplies were scheduled to start in the second quarter of 2018.
"The two parties have agreed to an adjustment to the price and the volume of LNG supply, thus enabling GAIL to develop incremental gas markets to offtake these volumes, thereby mitigating volume risk," GAIL said.
The move will diversify GAIL's LNG portfolio by spreading price reference indexes across multiple geographies, so as to provide consumers a greater flexibility in service, Chairman B. C. Tripathi said in a statement.
The company has also signed contracts for sourcing up to 5.8 million tonnes of LNG from the United States.
It is renegotiating its LNG purchase deals with U.S.-based Cheniere Energy LNG.A and Dominion Cove Point, Oil Minister Dharmendra Pradhan told lawmakers last month.
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