Gazprom signs 25-yr LNG contract with Indian GAIL
MOSCOW. June 19 (Interfax) - Gazprom has signed a firm contract with Indian GAIL on delivery of 3 million tonnes of liquefied natural gas (LNG) a year for 25 years, Gazprom Deputy CEO Alexander Medvedev told journalists on Wednesday.
"Our contract with GAIL has entered force. All preliminary conditions have been fulfilled or removed," Medvedev said.
He also said that Gazprom has prolonged the memorandum with GAIL under which the two companies are discussing a possible increase in LNG delivery volumes to 3.5 million tonnes a year.
They are also discussing possible LNG deliveries to Indian Oil, Medvedev said.
In the summer of 2012, Gazprom Marketing and Trading Singapore Limited (Gazprom Singapore) signed a memorandum of understanding with four Indian customers - Indian Oil Corporation Limited, GAIL (India) Limited, Gujarat State Petroleum Company and Petronet LNG Limited - for the delivery of 2.5 million tonnes of LNG per year to each, or a total of 10 million tonnes (11.1 billion cubic meters) per year, for 25 years.
Later a contract was signed with GAIL for the delivery of 2.5 million tonnes for 20 years beginning in 2019. The price of the contract was tied to the price of oil.
A source at the company told Interfax that this is the same contract, but with an increased amount, and it has gone into effect. However, the start date for shipments is still being negotiated, but the deadline for these negotiations is limited.
India is the fourth largest importer of LNG, importing 20.5 bcm of gas per year (about 18 million tonnes of LNG). The country's biggest supplier of LNG is Qatar, which supplied 15.3 million tonnes in 2013. India now has four terminals to receive LNG with combined capacity of 23 million tonnes per year.
Indian Oil is building a terminal for 5 million tonnes of LNG per year, which it plans to complete in 2015-2016.
Russia's Energy Ministry said in a press release that Energy Minister Alexander Novak discussed cooperation in the oil and gas sector with Indian Petroleum and Natural Gas Minister Dharmendra Pradhan at the 21st World Petroleum Congress in Moscow. Exports of LNG from Russia to India were identified as the most promising area.
"The development of new LNG projects along with the strong potential of Indian demand for natural gas puts relations in the area of LNG supplies in a special, strategic field of partnership that fully meets the interests of the two countries, which include ensuring energy security and diversification of sources of energy resource supplies to India," Novak said.
"The subject of the transnational project to build the Turkmenistan-Afghanistan-Pakistan-India gas pipeline, the implementation of which is being constantly monitored by the Energy Ministry, was touched on separately in the course of the negotiations. The heads of the two countries' energy ministries also discussed the prospects for cooperation in the coal industry and electricity sector," the ministry said.