Natural Gas GAIL to Sell Natural Gas from Russian Gazprom in India
GAIL has signed a legally binding 20-year Liquefied Natural Gas (LNG) Sales and Purchase Agreement (SPA) with Gazprom Marketing and Trading Singapore (GM&TS). Under the terms of the agreement, GAIL will receive 2.5 million tonnes of LNG per annum (equivalent to approximately 130 million MMBtu or 3.5 bcm or 122 bcf per annum) over a period of 20 years expected to start from year 2018-19.
Mumbai/India LNG will come from Gazprom’s Shtokman production facilities (130 tcf reserves), optimised and supplemented by GM&T’s global trading portfolio and capabilities. Under the contract, LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals in India.
Commenting on the development, B. C. Tripathi, Chairman & Managing Director, GAIL said, “This long-term LNG supply agreement with Gazprom, which holds the world’s largest gas reserves, is another milestone in Indian–Russian Energy Cooperation. The deal with Gazprom reinforces GAIL’s commitment to facilitate the development of the Indian market for which US$6 billion investments are being made by GAIL in creating Natural Gas infrastructure. The deal is introducing one of the world’s largest gas reserves to the global LNG market, thereby creating an environment for competition. It also marks GAIL’s efforts to create a well-diversified and secured supply portfolio to meet the ever growing energy requirements of the Indian economy and enable sustainable long-term growth for GAIL”.