Gazprom Marketing & Trading Singapore and Gail sign 20 year LNG supply deal

abarrelfullabarrelfull wrote on 02 Oct 2012 05:27
Tags: asia gail gazprom india lng

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Gazprom Marketing and Trading Singapore (GM&TS), a 100% wholly-owned subsidiary of Gazprom Marketing & Trading, has signed a legally binding 20-year liquefied natural gas (LNG) sales and purchase agreement (SPA) with GAIL (India) Limited (GAIL), following the signing of an earlier Basic Framework Agreement (BFA) by the two companies on 18 May 2011.

Under the terms of the agreement, GAIL will receive 2.5 million tonnes per annum of LNG (equivalent to approximately 130 million MMBtu or 3.5 bcm or 122 bcf per annum) over a period of 20 years. LNG will come from Gazprom’s production facilities, 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.

This agreement is a key milestone for both GAIL and Gazprom which reaffirms both their strong corporate partnership in developing India as one of the core markets for LNG business, and the bilateral trade relationship.

Vitaly Vasiliev, CEO of Gazprom Marketing & Trading, 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 whilst securing a long-term market for Russian gas.

“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.”

Commenting on the development, B. C. Tripathi, Chairman & Managing Director, GAIL (India) Limited 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 in investments are being made by GAIL in creating Natural Gas infrastructure. The deal also marks our 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.”

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