Houston-based United LNG will supply 4 million metric ton a year of liquefied natural gas to Petronet LNG for 20 years after the US Department of Energy gives its approval.
While both, Petronet and United LNG, signed a preliminary agreement for the supply of LNG, the final agreement – called the gas sale and purchase agreement (GSPA) – may be signed after the approval from the department.
The approval of US government is required because India does not have a free-trade agreement (FTA) with the country.
Once approved, the supply would begin from 2018. The deal will mark India’s first purchase of gas from the US. The gas will come from United LNG’s Main Pass Energy Hub in the Gulf of Mexico.
Both the firms are yet to work on the detailed terms and conditions including pricing. United LNG is developing the Main Pass export terminal with a capacity of 24 million tonne per annum, in association with Freeport McMoRan Energy LLC.
United LNG is expected to complete the terminal project by 2017-18 and may begin supply of LNG in 2018.
GAIL has also booked capacity to export another 2.3 million tonne at US-based Dominion Energy’s Cove Point liquefaction plant from 2017.
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