India received on 31
March 2018its first LNG cargo from the US under a long-term supply deal when a
ship carrying super-cooled natural gas arrived at Dabholin
A charter ship, MV Meridian Spirit, arrived at Dabhol after 25 days voyage from
Louisiana, state-owned gas utility GAIL India Ltd said in a press
GAIL India has
contracted 3.5 million tonnes per annum of liquefied natural gas (LNG) from US
energy firm Cheniere
Energy's Sabine Pass liquefaction facility in Louisiana. The first
cargo from the project arrived at Dabhol, the site of India's biggest gas-fired
It has also contracted long-term volumes for another 2.3 million tonnes
at Dominion Energy's Cove Point
"GAIL is one of the early movers to contract US LNG and has 5.8 million
tonnes per annum of US LNG in its portfolio. GAIL shall be receiving around 90
cargoes per annum from Sabine Pass and Cove Point LNG terminals," the
The LNG, he said, is indexed to US Henry Hub gas index as well
as crude oil. "GAIL will have an optimum portfolio mix of LNG indexed to
Henry Hub (HH) and crude oil and the customers will benefit from such a unique
price blend," it said.
The arrival of 'Meridian Spirit' at Dabhol marks beginning of LNG supplies
under the Henry Hub-indexed contracts, it added.
The vessel arrived close on the heels of Dabhol power plant and the adjoining
LNG receipt terminal being split into two separate companies. While state-owned
electricity generator NTPC is the lead for the
power block, GAIL is the majority owner of Konkan LNG Pvt Ltd, the firm which
will run the 5 million tonnes a year LNG receipt facility.
Last October, India imported its first shipment of crude oil from the US. It
had stopped oil exports in 1975, but this ban was lifted by former US President
Barack Obama in 2015.
In a statement, the US Embassy in India said United States Minister Counselor
for Commercial Affairs Patrick Santillo and Consul General to Kolkata Craig
Hall joined Oil Minister Dharmendra Pradhan to welcome the first
GAIL signed two 20-year LNG supply agreements potentially worth USD 32 billion
for US LNG exports from the Dominion Cove Point project in Maryland and the
Sabine Pass project in Louisiana. "Today's shipment is the first of the
contracted loads under the agreement," it said.
"The United States continues to partner with India across the broad range
of energy collaboration, whether through traditional energy sources like oil
the first crude oil shipment from the United States to India arrived in October
2017 in Odisha or LNG, or through other sources like coal and renewable
energy," said Santillo.
The shipment sets the stage for the upcoming April visit to India of US
Secretary of Energy Rick Perry for the US-India Strategic Partnership, the
GAIL had signed a sale and purchase agreement (SPA) with the US LNG exporter
Cheniere Energy in December 2011. The SPA went into effect March 1. Under terms
of the agreement, Cheniere will sell and make available for delivery to GAIL
about 3.5 million tonnes a year of LNG.
Cheniere's LNG is based on natural gas sourced from the US market, which
provides access to abundant and low-cost gas resources.
GAIL said India's trade with the USA, which stood at USD 126.1 billion in 2017,
is expected to increase owing to large-scale imports of LNG and crude oil in
coming years. "GAIL alone would be procuring approximately USD 2 billion
worth of LNG per annum from USA from FY 2018-19," the statement
Cheniere Energy Inc is the leading
exporter of US LNG. It is currently operating and constructing its Sabine Pass
LNG facility in Louisiana and is constructing a second liquefaction facility
near Corpus Christi, Texas. When both projects are complete, it is expected to
be a top-5 global supplier of LNG.
GAIL is India's biggest natural gas transportation and marketing company. It is
expanding pipeline network by 4,000 km at an investment of over USD 3 billion
to operate over 15,000 km by 2020. GAIL commands 75 per cent market share in
gas transmission and has a gas trading share of over 50 per cent in India.