Pradhan is back in favour and likely to stay on

Vol 19, PW 9 (14 Jan 16) People & Policy
     

Things are looking up for oil minister Dharmendra Pradhan following Qatar's decision to lower the price of long-term RasGas LNG for India.

Today it looks increasingly likely Pradhan will emerge unscathed from an imminent cabinet reshuffle in recognition of the direct role he played in convincing Qatar to accept an arrangement where Petronet-LNG pays half what it was paying earlier and to accept the waiver of approximately $1.8bn in penalties for LNG Petronet-LNG refused to lift under stringent 'take-or-pay' conditions in the 25-year SPA. Last month Pradhan looked certain to lose his portfolio after BJP leaders blamed him personally for the party’s election rout in Bihar.

But things are looking rosier. On January 5, RasGas delivered 135,917 cubic metres of LNG at Dahej aboard tanker Raahi priced at $6.28/mmbtu - exactly half the $12.58/mmbtu it paid a week earlier on December 28 for a similar load under the old formula.

Pradhan can and should take the credit. He lobbied hard for the rate reduction with Qatari energy minister Mohammed Saleh Abdulla Al Sada at the 6th OPEC International Summit in Vienna on June 4 and later in Doha on November 9 during the 6th Asian Ministerial energy roundtable.

Before his intervention Petronet-LNG, GAIL, IndianOil and Bharat Petroleum were struggling to convince RasGas. “This deal," exclaims a senior BJP source, "is India’s biggest diplomatic coup in the energy sector since Modi became PM.

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LNG Summit