GAIL (India) Limited and the Shipping of Corporation India Limited (SCI) yesterday signed a Memorandum of Understanding (MOU) to cooperate for transportation of LNG sourced by GAIL from USA.
The MoU was signed in the presence of Shri B.C. Tripathi, Chairman & Managing Director, GAIL and Shri B.K. Mandal, Chairman & Managing Director and Director (Finance), SCI. Other senior officials of GAIL and SCI were present on the occasion.
Under the MoU, both GAIL & SCI shall cooperate for transportation of 5.8 MTPA of LNG being sourced by GAIL from Sabine Pass and Cove Point terminals in USA. The cooperation 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.
GAIL has signed a LNG Sales & Purchase Agreement with Cheniere Energy Partners, LP (Cheniere) to procure 3.5 MMTPA of LNG from the latter’s Sabine Pass Terminal in Louisiana, USA for a period of 20 years. GAIL has also signed a Terminal Service Agreement with Dominion through GAIL Global (USA) LNG LLC for booking 2.3 MMTPA liquefaction capacity in the Cove Point LNG liquefaction terminal project located at Lusby in the state of Maryland. As the agreements are on FOB basis, GAIL is required to make its own arrangements for transportation of LNG from these terminals. The transportation of LNG is expected to begin from mid-2017.
Speaking on the occasion Shri B.C. Tripathi, CMD, GAIL said “LNG has become important business vertical of GAIL and the experience of SCI in the shipping business will bring huge synergetic advantage for both the companies. We expect that this partnership will enable faster development of in-house fleet operations capabilities for the Company.”
Shri B.K. Mandal, CMD and Director (Finance), SCI said that “With several LNG import projects being conceived in the country, LNG is seen as a key growth area for Shipping Corporation of India. SCI is planning to develop separate vertical within the Company to manage LNG shipping.”
GAIL, June 7, 2013; Image: SCI Facebook Page