GAIL to Acquire 26% Stake in US LNG Project

SEATTLE (Oil Monster): India’s Natural Gas Company, GAIL (India) Limited has invited an Expression of Interest (EOI). The company is planning to acquire a 26% stake in a US LNG (Liquified Natural Gas) project, including a 15-year gas sourcing contract.

This is major, as during Prime Minister Narendra Modi’s trip to the US for a meeting with President Donald Trump in February he offered to increase India’s US oil and gas purchase by a hefty amount.

As per the EOI document, GAIL stated that it is planning to secure 1 Million Metric Tons Per Annum (MMTPA) of LNG from an existing or upcoming liquefaction project of Natural Gas (NG) in the USA on a Free on Board (FoB) basis. The contract is for a period of 15 years on mutual terms and conditions.

The company also stated that the contract period of LNG supply may be extended additionally by 5/10 years as per mutual terms. LNG supply/offtake shall begin in Calendar Year (CY) 2029 to 2030 from existing Project and in CY 2030 from upcoming Project. 

GAIL announced that it will keep the option for acquisition “Target Equity” at Par in the Existing Project in the United States, or an Upcoming Project in the USA is scheduled for commissioning latest by CY 2030.

The document states that if the entire value chain of the project such as asset ownership, operation & maintenance, LNG sale rights, etc. is carried out by the single company, GAIL shall exercise the Equity Option in that company.

 Courtesy: www.indiainfoline.com