India has signed a $78-billion liquefied natural gas (LNG) deal with Qatar in a bid to increase the use of clean fuel in the country.

The deal will see Petronet LNG Ltd, India’s biggest LNG importer, extending the current pact with QatarEnergy by another 20 years till 2048.

The present sale and purchase agreement was signed in July 1999 and is valid till 2028, with an annual supply of 7.5 million tonnes (mt).

Under the new agreement, LNG supplies will be made on delivered (DES) basis commencing from 2028 till 2048, Petronet said.

The deal, signed during India Energy Week (IEW) at Betul, Goa, is at rates lower than the current prices.

A PTI report said the supplies will be made at “significantly” lower prices and at current rates, India will save about $0.8 per million British thermal unit (mBtu), resulting in a saving of $6 billion over the contract period.

India and Qatar had signed another agreement to supply one million tonnes of LNG annually in 2025, which will be negotiated separately.

While Petronet did not reveal the price in the new agreement, it is now buying gas from Qatar at 12.67 per cent of the prevailing Brent crude price and a fixed component of $0.52 per mBtu.

The new deal has dropped the fixed component. Besides, India will save an additional $0.30 per mBtu on shipping charges as Qatar takes up the responsibility of shipping by converting the deal to DES from free on board (FOB).

At $80 per barrel Brent, imports of 7.5mt every year will cost $3.9 billion; over a 20-year period, it will come to $78 billion. Following regasification at Petronet’s Dahej Terminal, GAIL will pick up 60 per cent of the LNG, Indian Oil Corporation, 30 per cent, and Bharat Petroleum Corporation Ltd, 10 per cent.

Petronet said the agreement would ensure India’s energy security and assure continued supplies of regasified LNG to major consuming sectors such as fertilisers, city gas distribution, refineries and petrochemicals, power and other industries.

"The existing long-term agreement between Petronet LNG & QatarEnergy today accounts for around 35 per cent of India’s LNG imports and is of national importance,” Akshay Kumar Singh, MD & CEO, Petronet LNG Ltd, said.

“This agreement will provide energy security and ensure a stable and reliable supply of clean energy and help India in its stride towards greater economic development,’’ Singh said.