GAIL inks 20-year deal for shale gas from US
12 Dec 2011
GAIL (India) Ltd – formerly the Gas Authority of India Ltd – has signed a 20-year deal with Sabine Pass Liquefaction, a subsidiary of US-based Cheniere Energy Partners, to import liquefied natural gas from the US. The deal can be extended by another 10 years under mutual agreement.
Shipping of the gas through the Panama Canal could start in the next eight or nine months, GAIL said in a statement today. Prices would be linked to the US benchmark Henry Hub.
At the current price of gas in the US and prevailing liquefaction and transportation rates, the price would be $10-11 per unit in India, about $5-6 cheaper than the recent LNG contract with an Australian firm running the Gorgon gas project there.
GAIL chairman and managing director BC Tripathi said, "The agreement with Cheniere will help company to ensure long term gas supply for the growing demand in the Indian market."
Under the deal, GAIL will pay Sabine Liquefaction as per contractual provisions on a Henry Hub basis after transfer of custody on a FOB basis. The LNG will be loaded onto GAIL vessels.
''GAIL will join BG and Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project, said Sabine Gas chairman and chief executive Charif Souki.