Gail to sell LNG supplies from US to Shell: report
20 May 2015
GAIL (India) Ltd, a Maharatna public sector company, has signed a preliminary deal with Royal Dutch Shell for the potential sale of liquefied natural gas (LNG) supply sourced from its portfolio, made up of US production, reports quoting sources close to the developments said.
Gail has signed preliminary agreements with other companies also, one report said, adding that the talks with Shell were at an advanced stage.
Gail first announced plans to sell 1 million tonnes per annum (mtpa) of supply over a 5-year period in 2013 but price negotiations with buyers delayed a deal, according to the reports.
Gail has contracted for purchase of 3.5 mtpa of LNG over 20 years from US-based Cheniere Energy from 2017.
It has also booked capacity to export another 2.3 mtpa at US-based Dominion Energy's Cove Point liquefaction plant from 2017.
Shell's offer was among the most attractive received, one of the three sources said.
The MoU with Gail was signed prior to Shell's $70 billion buyout of LNG major BG Group. However, that is unlikely to impact Shell's interest in the LNG supply from Gail, sources said.
The development comes after IndianOil and GAIL (India) Ltd, two Maharatna PSUs last week signed an MoU with Dhamra LNG Terminal Private Limited (DLTPL), a company owned by Adani Enterprises Limited for an onshore LNG regasification terminal having initial capacity of 5.0 MTPA, at Dhamra Port in Bhadrak district of Odisha.
As per the terms of the MoU, IndianOil and GAIL would reserve regasification capacity in the terminal to supply regasified LNG in the emerging gas markets in the eastern part of the country. IndianOil and GAIL would also have the option to hold equity in DLTPL at a later date.