 "GAIL books 2.3-mt liquefaction capacity in US")
GAIL Global (USA) LNG, a subsidiary of GAIL, has signed a 20-year terminal service agreement with Dominion Resources Inc, the company said in a statement on Monday.
Dominion would set up the liquefaction facilities in the premises of its existing 11.7 mt regasification terminal. Construction work is expected to start in 2014 to put the liquefaction facilities into service in 2017.
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At the liquefaction terminal, natural gas is received by pipeline from the field, liquefied, stored and loaded onto liquefied natural gas (LNG) carrier ships. At the regasification terminal, LNG is offloaded into storage tanks, regasified and placed into storage.
Dominion is marketing 4.6 mt and GAIL has booked 50 per cent of such capacity for 20 years. A major Japanese buyer holds the balance capacity in the terminal. Cove Point will be a premier facility in terms of direct access to the Marcellus and Utica shale plays, two of the most prolific shale gas basins in North America.
“The contracts signed with Cheniere and Dominion make GAIL one of the largest Henry Hub LNG portfolio holders and provide us an opportunity to market about 6 mt per annum of LNG from the US,” said B C Tripathi, chairman and managing director of GAIL.
Earlier, GAIL had signed an agreement with Sabine Pass Liquefaction, a subsidiary of Cheniere Energy Partners of the US, for a supply of 3.5 mt a year LNG.
Under this agreement, GAIL will procure its own natural gas and deliver it to the Cove Point pipeline for liquefaction at the terminal and loading into ships brought to the facility on the Chesapeake Bay.
“This would enhance GAIL’s scale of operations in the US where we already have a presence through our participation in a shale gas asset in the Eagle Ford basin. Our upstream acquisition efforts for gas sourcing and hedging would now intensify in US. This deal would also provide GAIL with an opportunity to trade part of the volume in the international market apart from organizing the ships required to transport rest of the volume to India,” Tripathi added.