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Gail India and the Shipping of Corporation India (SCI) today signed a memorandum of understanding (MOU) to cooperate for transportation of LNG sourced by Gail from the United States.
Under the MoU, both Gail and SCI shall cooperate for transportation of 5.8 million tonne per annum of LNG being sourced by Gail from Sabine Pass and Cove Point terminals in the US.
The co-operation would include SCI assisting Gail in the charter hiring of LNG ships and Gail assigning step-in right to SCI in the ownership of LNG Ships.
Gail has signed an LNG sales and purchase agreement with Cheniere Energy Partners, LP(Cheniere) to procure 3.5 MMTPA of LNG from the latter's Sabine Pass Terminal in Louisiana, in the US for a period of 20 years.
Gail has also signed a Terminal Service Agreement with Dominion through Gail Global (USA) LNG LLC for booking 2.3 MMTPA liquefaction capacity in the Cove Point LNG liquefaction terminal project located at Lusby in the state of Maryland.
As the agreements are on FOB basis, Gail is required to make its own arrangements for transportation of LNG from these terminals. The transportation of LNG is expected to begin from mid-2017.
B C Tripathi, chairman and managing director of Gail said, “We expect that this partnership will enable faster development of in-house fleet operations capabilities for the Company.”
