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GAIL to source gas from WGL Midstream for Maryland LNG terminal

Steel News - Published on Sat, 06 Dec 2014

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GAIL India said that its subsidiary, GAIL Global USA LNG LLC, has signed an agreement with the US-based WGL Midstream Inc for sourcing natural gas to produce about 2.5 million tonne of LNG at its Cove Point Terminal, Maryland, US.

WGLM is a subsidiary of WGL Holdings Inc, a prominent natural gas company in the US.

However, GAIL did not disclose the price at which it is sourcing the gas. The prevailing gas price in the US is in the range of USD 4 to USD 4.5 per million British thermal units.

The definitive gas sale and purchase agreement has been signed for 20 years and supplies are expected to commence from 2017 end when the LNG terminal, in which the GAIL subsidiary holds liquefaction capacity, becomes operational.

An official said that while the intention is to get this gas to India, the modalities are yet to be worked out.

Commenting on the development, Mr BC Tripathi, CMD of GAIL, said that \"We are now in the process of chartering LNG ships, thereby entrenching our presence across the complete LNG supply chain and bringing more value to Indian customers.\"

In a statement issued by GAIL, Mr Terry D McCallister, Chairman and CEO of WGL Holdings Inc, said that “WGL Midstream’s long-term relationship with GAIL capitalises on the growing supply of abundant natural gas from the Marcellus Shale production region. This growing supply source has been providing clean burning natural gas to the Northeast and Mid-Atlantic regions of the US and now will supply India as well.\"

Pace Global, Thompson & Knight and Amarchand Mangaldas assisted GAIL on the commercial and legal aspects of the transaction. WGL Midstream engaged Vega Energy Partners Limited, for the execution of these transactions. Vega will also play an ongoing role in the implementation of these contracts.

Source – Business Line

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Posted By : admin on Sat, 06 Dec 2014
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