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Cheniere begins LNG shipments to India’s Gail

EBR Staff Writer Published 07 March 2018

Cheniere Energy has started liquefied natural gas (LNG) supply from the Sabine Pass LNG facility in Louisiana, US, to its customer Gail, India's gas transmission and marketing company.

The cargo was loaded on-board Gail's first chartered LNG ship Meridian Spirit at Cheniere’s LNG export facility at Sabine Pass LNG project.

The shipment, which commenced on 01 March 2018, is part of a 20-year sale and purchase agreement (SPA) signed between the firms in December 2011. The deal has an option for an extension of up to ten years.

As per the deal, Cheniere agreed to sell approximately 3.5 million tons of LNG annually from the train four at the Sabine Pass LNG terminal to Gail.   

At that time, Cheniere said that Gail would purchase approximately 0.2 mtpa of bridge volumes upon the commissioning of train two at Sabine Pass terminal.

Gail chairman and managing director B.C. Tripathi said: “With supplies commencing from the US, GAIL will have a diversified portfolio both on price indexation and geographical locations,”

“This long term agreement would go a long way in strengthening the relationship between GAIL and Cheniere and reinforcing India-US trade ties.”

Cheniere Partners subsidiary Sabine Pass Liquefaction is operating the LNG facilities at the Sabine Pass LNG terminal located in Louisiana, adjacent to the existing regasification facilities.

Commenting on the move, the US Energy Association executive director Barry Worthington said: “Today’s shipment is significant because it means security for the world’s third largest energy consumer. Other countries are trying to secure their own resources in the face of rising energy demand marked by a projected 30 percent increase in global energy consumption by 2040.

“The US is the world’s largest natural gas producer, a leading supplier of LNG, and is expected to become the largest producer of crude oil this year.

“Concurrently, India is trying to increase its use of natural gas. The fuel comprises about 6 percent of India’s energy mix, while its government is taking steps to move the needle closer to 15 percent within five years. As India tries to secure energy supplies and reduce emissions by using more natural gas, the U.S. is a logical energy partner.”

The Sabine Pass site is designed to accommodate up to six liquefaction trains, each with a production capacity of approximately 4.5 million tons per annum (mtpa). The trains are capable of processing over 3.5 Bcf/d of natural gas.

To date, Cheniere has exported approximately 300 cumulative LNG cargoes from the Sabine Pass LNG facility.

Image: GAIL’s cargo loading LNG at Sabine Pass terminal in US. Photo: courtesy of Cheniere.