Gazprom inks conditional deal with Petronet for LNG supply

Russian oil giant Gazprom could deliver up to 2.5 million tonnes of liquefied natural gas (LNG) a year to India under a 25-year agreement signed between Gazprom Marketing & Trading, a unit of Gazprom, and Petronet LNG, India's largest LNG importer, on Wednesday.

But the agreement clearly spells out that it will be implemented in letter and spirit only if and when Gazprom has spare LNG available, and if the price and other terms and conditions are agreed between the two parties.

"Under the terms of the agreement, Petronet will receive up to 2.5 million tonnes per annum of LNG from Gazprom Marketing and Trading Singapore's (GM&TS) international supply portfolio for up to 25 years," Petronet said in a statement.

However, The Hindu report quoted officials in New Delhi as saying that Gazprom at present has no spare LNG to sell to India, as all of its 1.6 million tonnes of spare output is tied up for shipping to other customers.

Nonetheless, the agreement shows that the Indian government is keen to secure power for its burgeoning economy, as well as trying to cushion against global price fluctuations through direct bilateral agreements.

Petronet has also recently submitted a joint bid with Oil & Natural Gas Corp and GAIL (India) for a minority stake in Russia's Yamal LNG project, which is set to start production of up to 16 million tonnes of frozen gas a year in 2015-17.