GAIL, Shipping Corp in LNG Transport Deal

India's state owned entities GAIL and Shipping of Corporation India (SCI) have signed a deal to transport LNG sourced by GAIL from the US.

As per the deal the two parties would join hands for transportation of 5.8 million tonnes per annum of LNG being sourced by GAIL from Sabine Pass and Cove Point terminals in the U.S, The Hindu said.

The co-operation would include SCI assisting GAIL in the charter hiring of LNG ships and GAIL assigning step-in right to SCI in the ownership of LNG ships, The Hindu reported citing an official statement.

GAIL has signed an LNG sales and purchase agreement with Cheniere Energy to procure 3.5 million metric tonnes per annum of LNG from the latter’s Sabine Pass terminal in Louisiana, U.S. for 20 years.

The state owned energy firm has also signed a terminal service agreement with Dominion for booking 2.3 million metric tonnes per annum liquefaction capacity in the Cove Point LNG liquefaction terminal project located at Lusby in Maryland. Under this agreement, GAIL will procure its own natural gas and deliver it to the Cove Point pipeline for liquefaction at the terminal and loading into ships brought to the facility on the Chesapeake Bay. The transportation of LNG is expected to begin from mid-2017.