GAIL's First Time-Swap Deal for US LNG with Gunvor

Image: GAIL (India) Limited

By Aiswarya Lakshmi

Indian state-owned gas company GAIL has reached a
deal with Swiss energy trading firm Gunvor to swap American
liquefied natural gas (LNG) cargoes for shipments from other
sources, Reuters reported.

It is the first time-swap agreement by GAIL, which is trying to
juggle its LNG portfolio to cut costs for price-sensitive Indian
customers after a sharp fall in Asian spot prices made its U.S.
gas unattractive.

GAIL will sell Gunvor 0.6 million tonnes of next year's LNG
cargoes from Cheniere at a premium to GAIL's contracted price,
FOB Sabine Pass, Louisiana, under the terms of the deal.

GAIL has signed a 20-year purchase agreement for 3.5 mtpa of gas
from Cheniere's export facilities, plus another 2.3 mtpa from
Dominion Energy's Cove Point plant.

The deal equates to around 5 percent of India's 2015/16 LNG
imports and will support a government push to promote the use of
the cleaner fuel in fertiliser and the power sector, even as
India's local gas production is falling.

Mar 4, 2017

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