GAIL (India) to buy 2.5 MTPA of LNG from WGL Midstream

GAIL (India) subsidiary GAIL Global USA LNG has signed a sourcing agreement with the US-based WGL Midstream (WGLM) to buy about 2.5 MTPA of LNG at the Cove Point Terminal in Maryland.

The deal requires WGLM to sell up to 430,000 Dth/day of natural gas for about 20 years.

WGLM, which is a subsidiary of WGL Holdings, expects to purchase the majority of the natural gas through an existing arrangement with Antero Resources.

Deliveries are anticipated to start from late 2017 when the LNG terminal starts operations.

GAIL chairman and managing director B. C. Tripathi said: "This agreement is another milestone towards GAIL’s efforts in sourcing of LNG to meet the rising demand of gas in the Indian market.

"We are now in the process of chartering of LNG ships thereby entrenching our presence across the complete LNG supply chain and bring more value to the Indian customers."

WGL Holdings chairman, chief executive officer Terry McCallister said: "WGL Midstream’s long-term relationship with GAIL capitalizes on the growing supply of abundant natural gas from the Marcellus Shale production region.

"This growing supply source has been providing clean burning natural gas to Northeast and Mid-Atlantic regions of the United States and now will supply the country of India as well."

The existing arrangement between WGLM and Antero Resources consists of a firm sales agreement for 330,000 Dth/day, which will be used to serve GAIL subsidiary.

WGLM will have the option to acquire a 30% ownership stake in a 70 mile extension of an existing gathering pipeline system for about $150m.

The gathering system will support Antero deliveries to interstate pipelines serving the Mid-Atlantic market.