Petronet chief executive A K Balyan said the MoU with Gazprom was signed in Singapore on Monday, and the schedule of supplies, volumes and price would be worked out during future talks beginning next month.

"We will now be negotiate pricing, volume, supply timings, etc. Discussions on these would begin in a month's time and we want to expedite this and complete the deal as soon as possible," Balyan said in a statement from Singapore.

Based on market prices of $10 per million British thermal units, it could be worth about $1.3 billion a year, or $32.5 billion in total.

"GM&TS sees India as one of its key markets for LNG supplies, which also include Japan and other North Asian countries, as it continues to strengthen its presence and operations in Asia-Pacific,'' the statement said.

Nigel Kuzemko, Gazprom's Singapore-based director of LNG development, said, "We are delighted to have entered into this agreement with Petronet.

Given their proven operational capability and their key role as aggregator of LNG in India, we see Petronet as a strong strategic partner for Gazprom Marketing & Trading Singapore.''

Meanwhile, a Reuters report quoted a source at Gazprom that supplies could be from its trading portfolio and then from the giant Shtokman project. But the Shtokman Barents Sea gas deposit is not expected to start LNG production before 2017, which means Gazprom's marketing arm will have to buy or swap up to 2.5 million tonnes of LNG from the market until then.

GM&TS has sold a number of spot cargoes to India, but if negotiations are successful, this would be its first long-term contract with an Indian firm. Petronet currently buys 7.5 million tonnes a year of LNG from RasGas of Qatar on a long-term contract basis.