GAIL in 20-year pact to buy LNG from Russia's Gazprom

In what could be seen as another milestone in GAIL India Ltd’s race to secure gas supplies, the state-run company has signed an agreement with Russian energy giant Gazprom to buy 2.5 million tonnes per annum of gas for 20 years beginning 2018-19.

The company has “signed a legally binding 20-year liquefied natural gas (LNG) sales and purchase agreement with Gazprom Marketing and Trading Singapore, a wholly-owned subsidiary of Gazprom Marketing and Trading,” GAIL said in a press statement here.

LNG will come from Gazprom’s Shtokman production facilities, which have 130 trillion cubic feet of in place reserves. “Under the contract, LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej (Gujarat), Dabhol (Maharashtra) and Kochi (Kerala) terminals in India,” GAIL said without sharing price details.

Shtokman field, one of the world’s largest natural gas fields, lies in the Russian sector of the Barents Sea.

According to B C Tripathi, chairman and managing director of GAIL, the long-term LNG supply agreement with Gazprom, which holds the world’s largest gas reserves, is another milestone in the Indian–Russian energy cooperation.

In August this year, GAIL had signed a contract with French energy giant GDF Suez to import 800,000 tonnes of LNG from 2013 to 2014. GAIL has been expanding its global presence to secure gas supplies. It had earlier signed a 20-year sales and purchase agreement with Sabine Pass Liquefaction LLC, a unit of the US-based Cheniere EnergyPartners, for supply of 3.5 million tonnes per year of LNG beginning 2017.

It has also executed a gas sales purchase agreement with Turkmengaz of Turkmenistan for buying 38 million standard cubic meters per day of gas for 30 years through the Turkmenistan-Afghanistan-Pakistan-India pipeline.