New Delhi, Oct. 1 (PTI): GAIL India, the nation’s biggest natural gas distributor, has signed a 20-year deal to buy 2.5 million tonnes a year of liquefied natural gas (LNG) from the Singapore unit of Russian gas giant Gazprom OAO.
The LNG (natural gas that has been converted to liquid form for ease of transportation) will come from Gazprom’s Shtokman production facilities and will be priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals.
GAIL, the first Asian company to buy liquefied natural gas from the US, said the supplies would start in 2018-19.
In December 2011, GAIL had signed an agreement to buy 3.5 million tonnes of LNG a year for 20 years from Houston-based Cheniere Energy Partners LP’s Sabine Pass terminal in western Cameron Parish, Louisiana.
This year in August, it signed an agreement with GDF Suez to buy 12 cargoes of LNG, or about 0.8 million tonnes, of the fuel from 2013 to 2014.
GAIL “has signed a legally binding 20-year liquefied natural gas sales and purchase agreement with Gazprom Marketing and Trading Singapore, a 100 per cent wholly owned subsidiary of Gazprom Marketing & Trading,” the company said.
Gazprom’s Shtokman production facility has 130 trillion cubic feet of in-place reserves. This will be “optimised and supplemented by GM&T’s global trading portfolio and capabilities”, it said.
GAIL chairman and managing director B.C. Tripathi said, “This long-term LNG supply agreement with Gazprom, which holds the world’s largest gas reserves, is another milestone in India–Russia energy cooperation.”
“The deal with Gazprom reinforces GAIL’s commitment to facilitate the development of the Indian market for which $6 billion investments are being made by GAIL in creating natural gas infrastructure,” he said.
Gazprom Marketing & Trading CEO Vitaly Vasiliev said, “We are delighted to have signed this agreement with GAIL, during a period of rising demand for LNG in India. We are looking forward to working together with GAIL to help meet India’s expanding gas demand while securing a long-term market for Russian gas.”