(Updates with GAIL comment in fourth paragraph.)
Dec. 11 (Bloomberg) -- GAIL (India) Ltd. agreed to buy 3.5 million metric tons of liquefied natural gas a year from Cheniere Energy Partners LP for two decades.
The LNG deliveries are expected to start in 2017 from Houston-based Cheniere’s Sabine Pass LNG terminal in western Cameron Parish, Louisiana, the companies said today in a statement distributed by PR Newswire. They have an option to extend the agreement by 10 years.
Natural-gas producers in North America are expanding into new markets with LNG, super-chilled for shipping by tanker. Encana Corp., Canada’s largest gas producer, and Apache Corp. are proposing an LNG facility in Kitimat, British Columbia, to ship the fuel to Asia.
B.C. Tripathi, chairman of New Delhi-based GAIL, said in the statement that the accord will help the company to “ensure long-term gas supply for the growing demand in the Indian markets.’
The LNG price will be linked to a benchmark U.S. price and included a fixed component, the companies said.
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