Gazprom on deal-signing spree with Indian gas importers

Gazprom, the Russian government-promoted oil and gas giant, seems to be on a deal-signing spree with Indian importers. Over the last few days, Gazprom Global LNG, the export arm of Gazprom,  has signed accords for the long-term supply of liquefied natural gas to GAIL (India) Ltd, Gujarat State Petroleum Corp Ltd (GSPC), and Petronet LNG Ltd.

The deals have been signed through affiliate Gazprom Marketing and Trading Singapore Pte Ltd (GM&TS), a fully owned unit of Gazprom Marketing and Trading.

The Russian company will supply 2.5-million tonnes per annum (mtpa) to each of them, Gazprom said on its website. While prices are yet to be negotiated, the supply will start from 2016 and continue for 25 years.

Reportedly, at least half a dozen areas have been identified in the country for setting up LNG terminals, including Okhamadhi by the GVK Group and Pipavav by Mumbai-based Swan Energy Ltd, said a Gujarat state government official close to the development.

While GSPC will import the gas mainly through its proposed terminal at Mundra - to build which it has joined hands with the Adani Group - Petronet and GAIL require gas on a long-term basis for their proposed terminals at Dabhol. Petronet, which is setting up an LNG terminal in Kochi, is also looking at expansion in Gujarat.

However, what most reports fail to highlight is that the Gazprom deals are contingent on several factors, not least of them the availability of gas with Gazprom (which tends to prioritise the highest bidder) and the precise details of the gas agreements signed by the importer.

The long-term LNG supply agreement is a natural step for all parties after a number of successful LNG cargo deliveries by Gazprom to importers in India since 2007, the company said on Thursday. It company sees India as a key market for LNG, along with Japan and other north Asian countries, as it continues to strengthen its presence and operations in Asia-Pacific.

''We are delighted that our successful partnership with GAIL, GSPC and Petronet has laid the foundations for these strategic LNG supply agreements,'' said Frédéric Barnaud, president and managing director, Gazprom Global LNG. ''Thanks to our Russian LNG portfolio, we are confident Gazprom will lead the strengthening growth of the LNG markets, in India and across the world.''

(See: Gazprom inks conditional deal with Petronet for LNG supply)