BS reported that state owned gas utility GAIL India has signed an agreement to buy 3.5 million tonnes a year of LNG for 20 years from a US firm to meet India's growing energy needs.

GAIL in a press statement said that "GAIL has signed a Sales and Purchase Agreement (SPA) for supply of LNG over 20 years with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, LP, USA for supply of 3.5 million tonnes per annum of LNG.”

It said that "Under the SPA, GAIL will pay Sabine Liquefaction as per contractual provisions on a Henry Hub (US gas benchmark) basis after transfer of custody on FOB. LNG will be loaded onto GAIL's vessels.”

The SPA has a term of 20 years commencing upon the date of first commercial delivery, and an extension option of up to 10 years.

The LNG from Sabine Pass shall form a part of the basket for feeding LNG to Dabhol terminal in Maharashtra and Kochi in Kerala.

Mr B C Tripathi CMD of GAIL said that "The SPA with Cheniere will help GAIL to ensure long term gas supply for the growing demand in the Indian market."

This will be in addition to other initiatives being undertaken by GAIL which includes building captive LNG facilities in India and augmenting its transmission capacity from 175 million standard cubic metres per day to over 300 mmsmcd over the next two years.

(Sourced from BS)