07-03-2018

India redraws energy map with US gas cargo

India on Tuesday embarked on a voyage to redraw its energy map, with the first shipload of liquid gas from the US setting sail for Dabhol in Maharashtra from the US-based Cheniere Energy’s Sabine Pass LNG (liquefied natural gas) project in Louisiana.
This is the first time that gas will flow directly from the US mainland to India to truly open a new energy route, unlike state-run refiners who last October bought a few shipments of US crude from trading houses through spot market tenders.

The commencement of US gas supplies under a 20-year deal signed by GAIL in December 2011 will strengthen New Delhi's bargaining power with its predominantly West Asian energy suppliers and help the Narendra Modi government’s efforts at raising the share of clean-burning gas in India’s energy basket.

‘Meridian Spirit’, the first cryogenic ship chartered by GAIL for wheeling US gas, set sail from Sabine Pass after a brief ceremony attended by GAIL chairman B C Tripathi, Cheniere CEO Jack Fusco, India’s consul-general in Houston Anupam Ray. The vessel will dock to offload its cargo at GAIL’s Dabhol terminal on or around March 28th, the company said in a statement.

The ship’s journey marks vindication of GAIL chairman B C Tripathi’s bold and forward-looking decision to tie up supplies from the US in December 2011, a time when the US was far from becoming a swing maker in a global oil and gas trade -- dominated by West Asian suppliers -- and shipping costs from North America considered prohibitive.

GAIL’s term contracts with Sabine Pass and Dominion Cove Point projects make the company one of the largest holders of liquid gas portfolio linked to Henry Hub -- the US gas price benchmark -- and will allow it to market 6 million tonne of US gas. The company will use US gas to replace spot cargos it buys to meet market demand. It has entered into time-swap deal for a million tonne of US gas for 2018-19 in an attempt to recast its supply portfolio in line with domestic demand.

GAIL had also become the second Indian entity after Reliance Industries Ltd to have invested in the US shale industry, buying a 20% stake in Eagle Ford Shale of Carrizo Oil & Gas.

Both Cheniere and Dominion projects have US energy department's approval to export gas to countries like India that do not have free trade agreement with Washington.

Source: TOI

Previous Next
 

Huge Opportunities For Investment in Maritime Sector: Nitin Gadkari

View More Videos


Gallery

India Shipping and Offshore Summit

View All Albums