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India starts importing LNG from US for the first time

The shipment is being sent under a twenty-year agreement between Indian gas utility major GAIL India and US-based Cheniere Energy’s Sabine Pass liquefaction facility in Louisiana.

Published: 07th March 2018 01:49 AM  |   Last Updated: 07th March 2018 01:16 PM   |  A+A-

Image used for representational purpose.

By Express News Service

NEW DELHI:India’s relationship with the US as a major consumer of the oil and gas produced in the latter, advanced a step further on Tuesday with the first shipment of US-produced gas bound for India flagged off from Louisiana.

The shipment is being sent under a twenty-year agreement between Indian gas utility major GAIL India and US-based Cheniere Energy’s Sabine Pass liquefaction facility in Louisiana.“The cargo has been loaded on-board GAIL’s first chartered liquefied natural gas (LNG) ship ‘Meridian Spirit’. This LNG cargo originated from Cheniere Energy’s LNG export facility at Sabine Pass LNG project,” GAIL said, adding that the cargo will discharge LNG at GAIL’s Dabhol terminal on or around March 28.

GAIL had signed the initial sale and purchase agreement (SPA) with Cheniere Energy in December 2011. That SPA went into effect from March 1, 2018, and under the contract, GAIL will receive 3.5 million tonnes per annum of LNG from the US-based LNG exporter.

The development comes on the heels of India’s first import of crude oil from the US in October, last year. India has been diversifying its oil basket over the last few months in an effort to keep the oil and gas prices import bill down.

While the US had stopped oil exports in 1975, a ban that was only lifted by former US President Barack Obama in 2015, the country has rapidly become a oil sector powerhouse.

According to the International Energy Agency’s latest report, production increases in the US are expected to take care of 80 per cent of global demand growth in the next three years.“With supplies commencing from the US, GAIL will have a diversified portfolio both on price indexation and geographical locations,” GAIL CMD B C Tripathi said.



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