Data & analytics solutions

Insight 22 September 2017

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Report summary

Amidst the LNG glut, buyers are putting pressure on sellers to renegotiate contracts signed during the boom. The reported Gorgon LNG contract renegotiation between Petronet and ExxonMobil marks an early development in that trend, presenting offsetting value impacts as lower prices are traded for increased volumes. This insight presents analysis of the different value impacts the renegotiations may afford both parties under the potential new deal terms reported to date. It highlights the possibility for, and caveats around, these renegotiations setting a precedent for further LNG contract renegotiations in Asia.

Contract renegotiation strategy déjà vu
Key terms of the contract may change
Lower price is offset by higher volumes and revenues
Move to DES India may benefit both parties
Implications for market in India
A prelude to more price renegotiations across Asia?

Tables and charts

This report includes 4 images and tables including:

LNG price renegotiations – Petronet and ExxonMobil trade more LNG for a lower price: Image 1
Exxon annual revenue impact
India contracted supply vs demand
LNG price forecast into Japan