* To buy 4 mln tonnes of LNG a year for 20 years
* In talks to buy stake in liquefaction facility in Gulf of
* Petronet to commission Kochi terminal in July
NEW DELHI, April 25 India's Petronet LNG
has signed an initial agreement with Houston-based
United LNG to buy 4 million tonnes of liquefied natural gas
(LNG) a year for 20 years, a senior Petronet executive said on
India has been scouting for oil and gas assets abroad to
meet rising local demand. Booming shale gas production following
advances in drilling technology has put the United States in a
position to be a net exporter.
"If everything goes well supplies from United LNG will begin
in 2018. We hope to finalise commercial terms and sign SPA (sale
purchase agreement) by the end of this year," Petronet's head of
finance, R. K. Garg, told Reuters.
Asia's third-largest economy is seeking long-term LNG
contracts and aims to triple its LNG import capacity to 45
million tonnes in five years, Garg said.
India's gas output has been curbed by problems in the D6
block off India's east coast, operated by Reliance Industries
, while state-run Oil and Natural Gas Corp is
struggling to arrest declining production from an ageing field.
Fuel shortages, due to the lower local gas output and
less-than-estimated coal production, have crippled India's power
United LNG would supply the super cooled gas from the Main
Pass Energy Hub project in the Gulf of Mexico, Garg said, adding
this would be Petronet's first gas purchase deal with prices
linked to U.S. Henry-Hub natural gas futures.
LNG is expensive in Asia , at about $15 per million
British thermal units (mmBtu), as it is linked to oil, while a
boom in U.S. shale gas output has pushed down prices there
to around $4.2 per mmBtu.
Petronet also discussed buying a stake in United LNG's
liquefaction facility in the Gulf of Mexico, Garg said.
"The deal is preliminary, numbers and pricing are yet to be
finalised," he added.
Petronet buys 7.5 million tonnes of LNG a year under a
long-term deal with Qatar at its 10 million tonnes a year LNG
terminal at Dahej in western India.
It is also building a 5-million-tonne-per-year terminal in
the southern Indian city of Kochi and has a deal to buy 1.5
million tonnes of LNG a year from Australia's Gorgon project.
Kochi terminal, which was to be commissioned by end-2012,
will now start operations in July, Garg said. "Commissioning is
linked with readiness of consumers and pipeline network. We hope
everything will be in place by July," he added.
Petronet also aims to build a 5 million tonne a year LNG
terminal at Gangavaram in the east coast by 2016.