By Debiprasad Nayak
MUMBAI--India's state-run Petronet LNG Ltd. (532522.BY) said
Thursday that it has signed a preliminary agreement with U.S.-based
United LNG, LP to purchase around 4 million metric tons a year of
liquefied natural gas for 20 years.
India, one of the biggest importers of oil and gas in Asia,
meets more than 75% of its oil and gas requirements through
imports, and its companies have been scouting for energy assets
overseas amid falling output from ageing local assets.
Petronet LNG said in a statement that the agreement is expected
to be finalized by the end of this year.
The supply of LNG could begin sometime in 2017-18, R.K. Garg,
Petronet LNG's director of finance, told television channel CNBC
TV18.
Buyers in Asia are looking to the U.S. to meet their rising
energy requirements, as the shale revolution has left North America
with a huge surplus of gas and prices that are far below those in
Asia or Europe. LNG prices in Asia are often three to four times
higher than in the U.S. because of a regional supply deficit.
While the U.S. has a surplus of cheap gas now, substantial
exports could push domestic prices higher, which in turn could
ignite a political backlash against foreign sales.
Petronet LNG said United LNG would supply the LNG through the
Main Pass Energy Hub based off the Louisiana coast in the southern
U.S.
In 2011, GAIL (India) Ltd. (532155.BY), another state-run gas
processing and distribution company, signed a contract to buy
around 3.5 million tons of LNG annually for 20 years from Cheniere
Energy's (LNG) Sabine Pass facility in Louisiana.
Write to Debiprasad Nayak at debi.nayak@dowjones.com
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