Gazprom to supply GAIL 2.5 mt of LNG per annum for 20 years

Russian gas major Gazprom will supply 2.5 mt liquefied natural gas for 20 years to GAIL (India) Ltd. The supplies are expected to start from 2018-19.

This LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals in India. At present, gas price in India ranges from $4.2/mmBtu (domestically produced) - $ 13-14/mmBtu (spot LNG).

GAIL has signed a legally binding 20-year LNG sales and purchase agreement (SPA) with Gazprom Marketing and Trading Singapore (GM&TS), a 100 per cent wholly owned subsidiary of Gazprom Marketing & Trading, GAIL said in a statement.

LNG will come from Gazprom’s Shtokman production facilities (130 tcf reserves), optimised and supplemented by GM&T’s global trading portfolio and capabilities.

B.C. Tripathi, Chairman & Managing Director, GAIL (India) Ltd, has been maintaining that to meet the growing appetite of the Indian market, GAIL has been expanding its global presence to secure long term gas supplies.

Speaking on this partnership, Vitaly Vasiliev, CEO of Gazprom Marketing & Trading, said: “We recognise GAIL’s strength as the major gas player within India, enabling flexible access to a rapidly developing market and are confident that this SPA will further strengthen our already well-established LNG trading relationship.”

GAIL had earlier signed a 20 year SPA with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Partners, USA for LNG supply of 3.5 million tonnes annually. The company has also executed the gas sales purchase agreement with Turkmengaz for 38 MMSCMD for 30-year supply through the TAPI pipeline.

It has signed an LNG supply agreements with GDF SUEZ, for supply of 0.8 million tonne from 2013 to 2014, and with Gas Natural Fenosa, Spain to ensure a total supply of approx. 3 bcm (billion cubic metres) of LNG to GAIL over the next three years to begin from January 2013.

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