Australia’s LNG Ltd signs 20 yr deal to supply gas to India

The Dollar Business Bureau

Australian public listed company Liquefied Natural Gas Ltd (LNG Ltd) has signed a deal for potentially supplying gas to India from its proposed Magnolia LNG Project in the US for 20 years. 

LNG Ltd entered into a Heads of Agreement (HOA) with Vessel Gasification Solutions, Inc (VGS) for supplying 4 million tonnes of LNG a year from its project in Lake Charles, Louisiana, for 20 years, LNG said in a statement.

“The non-binding HOA provides for a 20-year Free-on-Board (FOB) Sale and Purchase Agreement (SPA) of up to 4 million metric tonnes per annum of liquefied natural gas,” it said. 

VGS Group is an Indian-American company, which is setting up an LNG floating import and regasification unit on the seashore of Kakinada in Andhra Pradesh.

The project will be built in two stages, with the first phase establishing a Floating Storage Regasification Unit (FSRU) having a 4.47 million tonnes capacity and in the second phase the capacity would be increased to 8.94 million tonnes. 

VGS has been targeting to set up the first liquefied natural gas import unit on the east coast however it did not divulge details on the timeliness for setting up the import unit or supplying of gas from the US, the statement said. 

Greg Vesey, MD & CEO, LNG Limited said, “We are looking forward to supply gas for long-term to India’s market in order to meet their increasing requirements for clean energy. Largely, this pact represents another major step forward for the Magnolia LNG Project.” 

Gaurav Tiwari, President, VGS, said, “We are highly excited to take this step further in our partnership with Magnolia, and looking forward to work with the Magnolia LNG team to bring a substantial tranche of LNG from the US to a major new market on the Indian east coast.”

Magnolia is fully allowed and has required approvals for exporting gas to FTA as well as non-FTA countries, the statement said.