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NEW DELHI: Petronet LNG, the nation's largest liquefied natural gas (LNG) importer, on Wednesday said it had signed a preliminary agreement with Gazprom of Russia for buying up to 2.5 million tonnes a year of LNG. Interestingly, the pact clearly spells out that the agreement will be implemented in letter and spirit as and when Gazprom has spare LNG available and if the price and other terms and conditions are agreeable between the two parties.
“Under the terms of the agreement, Petronet will receive up to 2.5 million tonnes annually of LNG for up to 25 years from the international supply portfolio of Gazprom Marketing and Trading Singapore (GM&TS),'' Petronet said in a statement. However, officials said Gazprom at present had no spare LNG to sell to India and all of its 1.6 million tonnes of gas in its liquid form was tied up for shipping to customers. The MoU might be part of the strategy on the part of Gazprom to show to the world that it was talking to major consumers like China and India for selling LNG.
Petronet CEO A. K. Balyan said the MoU was signed in Singapore on Monday and the schedule of supplies, volumes and price would be worked out during future talks beginning next month. GM&TS has sold a number of spot cargoes to India but if negotiations are successful, this would be its first long-term contract with an Indian firm. Petronet now buys 7.5 million tonnes a year of LNG from RasGas of Qatar on a long-term contract. The gas is cooled to sub-zero temperature to turn it into liquid. LNG is imported in cryogenic ships at its facility at Dahej in Gujarat. This is then re-converted into gas and sold to consumers. “GM&TS sees India as one of its key markets for LNG supplies, which also include Japan and other North Asian countries, as it continues to strengthen its presence and operations in Asia-Pacific,'' the statement said.
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