GAIL and Cheniere Sign 20-Year LNG
OREANDA-NEWS. December 13, 2011. GAIL (India) Limited has signed a Sales and Purchase Agreement (SPA) for supply of LNG over 20 years with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, L.P., USA for supply of 3.5 million tonnes per annum (MTPA) of LNG.
The LNG would be supplied from train four of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish,
Under the SPA, GAIL will pay Sabine Liquefaction as per contractual provisions on a Henry Hub basis after transfer of custody on FOB. LNG will be loaded onto GAIL’s vessels. The SPA has a term of twenty years commencing upon the date of first commercial delivery, and an extension option of up to ten years. LNG deliveries are expected to occur upon commencement of operations of train four in 2017. However, bridging supplies of LNG will start from train two in the year 2016. The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second phase of the liquefaction project.
Commenting on the development, Mr. B. C. Tripathi, Chairman & Managing Director, GAIL (India) Limited said, “The SPA with Cheniere will help GAIL to ensure long term gas supply for the growing demand in the Indian market. This will be in addition to other initiatives being undertaken by GAIL which includes building captive LNG facilities in
“GAIL will join BG and Gas Natural Fenosa as the next foundation customer for our
GAIL (India) Limited is India's flagship Gas Transmission and Marketing Company under the Ministry of Petroleum and Natural Gas, Government of India. Over the years, GAIL has transformed into an integrated energy company with global footprints by means of integrating along the Natural Gas value chain. After having started as a gas transmission company during the mid eighties, it has grown organically over the years by building large network of Natural Gas trunk Pipelines covering a length of
In the last two decades, GAIL has created a sizeable natural gas market in the country and presently has a capacity to transport 175 MMSCMD of Natural Gas through its Transmission Network. Currently, GAIL’s market share in gas transmission in the country is 72% with plans to double up the existing transportation capacity in the next two to three years.
Besides holding equity in
GAIL has acquired its first shale gas assets in the
GAIL has also set up a wholly-owned subsidiary company viz. GAIL Global (
Cheniere Partners owns 100 percent of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish,