The document was signed on January 16, 2018, in New Delhi between Gajendra Singh, Director Marketing GAIL and Vitaly Vasiliev, CEO Gazprom Marketing & Trading Limited.
A long-term LNG Sale & Purchase Agreement building up to 2.5 MMTPA of LNG on DES (Discharge-ex-Ship) basis was executed by GAIL with Gazprom Marketing & Trading in the year 2012, the supplies under which are scheduled to start in Q2 2018.
The 2 parties have agreed to an adjustment to the price and volume of LNG supply thus enabling GAIL to develop incremental gas markets to offtake these volumes thereby mitigating volume risk.
Vitaly Vasiliev, CEO of Gazprom Marketing & Trading, said: «I am excited to announce that we agreed to deliver on our original promise and begin LNG supplies in 2018. We look forward to strengthening a mutually beneficial partnership with Gail going forward.»
Speaking on the development, Managing Director of GAIL B. Tripathi said that «This agreement is a key mile stone affirming partnership of GAIL and Gazprom in developing LNG markets under Indo-Russia trade relationship.»
This deal is a step for GAIL to diversify LNG portfolio by spreading price reference indices across multiple geographies so as to provide consumers greater flexibility in service. This chapter of relationship between the 2 companies opens up exploration of further opportunities in portfolio optimization and LNG swap dealings for mutually beneficial outcomes.
The SPA signed in 2012 is a 20-year LNG sales and purchase agreement following the signing of an earlier Basic Framework Agreement by the 2 companies on 18 May 2011.
With start of the LNG supplies from USA and Gazprom in 2018, GAIL’s LNG portfolio would increase multi-fold bringing it in the league of some of the largest traders of LNG in the world.