GAIL (India) Ltd. signed a 20-year sales and purchase agreement (SPA) with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Partners, for the supply of 3.5 million tonnes/year of LNG.
“The SPA with Cheniere will help GAIL to ensure long-term gas supply for the growing demand in the Indian market,” said GAIL Chairman and Managing Director B.C. Tripathi, who added that his firm seeks more US shale gas assets.
Under the SPA, GAIL said it will pay Sabine “as per contractual provisions on a Henry Hub basis after transfer of custody on fob. LNG will be loaded onto GAIL’s vessels.”
The SPA has a term of 20 years starting from the date of first commercial delivery, and a 10-year extension option. LNG deliveries are to occur upon commencement of operations of train four in 2017, but bridging supplies of LNG will start from Sabine’s train two in 2016.
Last month, Gas Natural Fenosa entered into a deal with Cheniere Energy to buy 3.5 million tpy of LNG the company’s Sabine Pass facility by 2016, paying Cheniere $454 million a year for use of the terminal.
In October, Cheniere signed a 20-year agreement to supply BG Group with LNG from US shale gas, aiming to export 3.5 million tpy of LNG from the Sabine Pass terminal, at a cost of 115% the US price plus $2.15/MMbtu.
The Sabine Pass LNG terminal project is being developed by Sabine Liquefaction and would include up to four liquefaction trains capable of producing up to 18 million tpy of LNG.
Cheniere Partners owns 100% of the Sabine Pass LNG receiving terminal on the Sabine Pass Channel in western Cameron Parish, La. The Sabine Pass terminal has regasification and sendout capacity of 4 bcfd and storage capacity of 16.9 bcf of gas equivalent.
Contact Eric Watkins at [email protected].
