Gail to Sell LNG Supplies from US to Shell?
By Aiswarya Lakshmi
Thursday, May 21, 2015
GAIL (India) Ltd has signed a preliminary deal with Royal Dutch Shell for the potential sale of liquefied natural gas (LNG) supply sourced from its portfolio, made up of US production, says Reuters and local media reports.
Gail, a Maharatna public sector company, has signed preliminary agreements with other companies also, one report said, adding that the talks with Shell were at an advanced stage. Shell's offer was among the most attractive received said sources.
The Indian state-owned company revealed plans to sell 1 million tons per year in 2013. It planned to sell the volume over a period of five years. It had previously signed a supply deal with Cheniere for 3.5 mtpa of LNG over a period of 20 years.
Gail has contracted for purchase of 3.5 mtpa of LNG over 20 years from US-based Cheniere Energy from 2017.
The MoU with Gail was signed prior to Shell's $70 billion buyout of LNG major BG Group. However, that is unlikely to impact Shell's interest in the LNG supply from Gail, sources said.
Gail's Memorandum of Understanding with Shell was signed prior to Shell's announced $70 billion buyout of LNG heavyweight BG Group. It was not clear whether the move will lessen Shell's appetite for additional supply.