GAIL may strike $12-billion deal to import US shale gas: report
10 July 2012
State-run gas utility GAIL Ltd is in the final stages of signing a 20-year deal to import 2 million tonnes of liquefied natural gas annually from the US east coast, the Times of India reported today, citing sources close to the development.
The deal could be worth over $12 billion, going by the $20 billion deal GAIL had signed in December 2011 with Sabine Pass Liquefaction for import of 3.5 million tonnes of liquid gas annually, the report said.
Senior GAIL executives and officials of the ministry of petroleum and natural gas were in the US last week to finalise the deal, it added.
According to the report, legal advisors Clifford Chance is vetting the sale and purchase agreement for the deal while Ernst & Young is conducting financial and taxation due diligence.
Shipping Corporation of India (SCI) has been asked to select the cheapest carrier from around the world for chartering so as to reduce shipping costs and the landed cost of gas in India.
GAIL, the report said, had initiated talks with three other US shale gas companies that plan to export liquid gas on the east coast, but that the talks have faltered on their price offer.