India's GAIL plans more LNG deals with U.S.
NEW DELHI (Reuters) - Gas firm GAIL (India) Ltd aims to sign more deals with the United States for sourcing liquefied natural gas (LNG) as it hopes to lock-in customers for existing contracts by the end of July, company officials said on Monday. GAIL has a deal to buy 3.5 million tonnes per annum (mtpa) of LNG for 20 years from U.S.-based Cheniere Energy and has also booked capacity for another 2.3 mtpa at Dominion Energy's Cove Point liquefaction plant. The company is in talks with Indian customers, except those from the regulated power and fertiliser sectors, for gas sales agreements ahead of supplies from the U.S. in 2017/18.
"Sometime by the end of July we hope to sign deals for 3.5-4 mtpa of U.S. LNG volumes...we are selling largely to city gas distribution companies, steel, textile and ceramics as well as refineries," GAIL Chairman B. C. Tripathi said.
Tripathi hoped the new government, led by Narendra Modi, will reform the power and fertiliser sectors and spur local demand for the costly imported fuel and help GAIL build new pipelines. Modi, sworn in as India's prime minister on Monday, is seen as a business-friendly leader
GAIL aims to trade 1 mtpa of the super cooled gas sourced from the U.S. through its trading arm in Singapore. Key global companies are willing to buy the remainder of about 1 mtpa LNG at an attractive price, Prabhat Singh, GAIL's marketing head, said. He declined to name the companies. "After selling the contracted volumes, we will be striking more LNG deals with the U.S.," Singh said, adding his firm will change its strategy for the new overseas deals. "For future deals with the U.S., we will sign back to back agreements with the buyers and sellers instead of first striking deals and then looking for customers," he said. GAIL will float a tender next month to charter 6-8 LNG carriers for shipping gas from the U.S. to India, Tripathi said.
To meet local gas demand GAIL aims to import 36 LNG cargoes under short term and spot deals in 2014/15 versus 26 in 2013/14.
GAIL operates a 5 mtpa Dabhol LNG terminal on the west coast and partners the Andhra Pradesh government for a planned regasification facility on the east coast.
Tripathi said Royal Dutch Shell is in talks with the Andhra Pradesh State government to buy an up to 24 percent stake in the Kakinada LNG project on the east coast.
The Dabhol terminal has been shut since May 1 and will resume normal operation after the monsoon at the end of September or early October, Tripathi said.
(Reporting by Nidhi Verma; editing by Susan Thomas)
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