GAS NATURAL FENOSA of Spain said it has signed a deal to supply approximately 3 bcm of liquefied natural gas for three years to GAIL of India, equivalent to 10% of annual consumption in Spain.
The supply will begin next January.
The contract with Gail strengthens the position that GAS NATURAL FENOSA has in gas sales and marketing in the Pacific and is a significant step in the company’s strategy for growth and diversification in new markets with great potential. The LNG market in India is one of those with the best perspectives for development in the whole world in the coming years due to the growing energy needs of the Asian giant.
In addition to the supply agreement, the two companies have signed an industrial cooperation agreement in order to explore joint development of energy projects in India. GAS NATURAL FENOSA and Gail and will analyse opportunities for collaboration in gas distribution, wholesale and retail marketing and infrastructures, as well as projects abroad.
The Spanish multinational, thanks to this agreement, will be able to establish a framework for cooperation with the leading gas operator in India and to consolidate its presence in the final markets.
The agreement with Gail is another step in the growing internationalisation of the company. In the first half of 2012, the international activities of GAS NATURAL FENOSA represented 42.2% of EBITDA, compared to 34.4% in the same period of 2011.
A Multinational Leader in the Energy Sector
GAS NATURAL FENOSA is one of the leading multinational companies in the gas and electricity sector; it operates in 25 countries and has around 20 million customers and a 15.4 gigawatt power generation capacity.
It is the largest integrated gas and electricity company in Spain and Latin America, the leader in natural gas sales in the Iberian Peninsula and the biggest natural gas distributor in Latin America. With a fleet of 11 methane tankers, it is one of the largest operators of liquefied natural gas in the world and a company of reference in the Atlantic and Mediterranean basins, where it operates 30 bcm.
Gail, Reference Operator in India
In order to meet the growing appétite of Indian market, GAIL has been expanding its global presence to secure long term gas supplies. GAIL earlier signed a 20 year Sales and Purchase Agreement with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Partners, USA for supply of 3.5 million tonnes per year of LNG. GAIL has also executed the Gas Sales Purchase Agreement with Turkmengaz for 38 MMSCMD for 30 year supply through the TAPI pipeline.
Besides, GAIL has also set up a wholly- owned subsidiary company GAIL Global (Singapore) Pte. Ltd. in Singapore for sourcing LNG, and petrochemicals. GAIL has acquired 20% interest in Carrizo’s Eagle Ford Shale acreage position in USA.
GAIL owns and operates over 9500 Km of high pressure cross country natural gas pipeline network and is in the process of significantly increasing its pipeline network to reach every part of India. Within the next two to three years, GAIL will have a pan-India pipeline infrastructure spanning over 14,500 km.
GAIL (India) Ltd., is India’s principal Natural Gas Company with activities ranging from Gas Transmission and Marketing to Processing (for fractionating LPG, Propane, SBP Solvent and Pentane); transmission of Liquefied Petroleum Gas (LPG); production and marketing of Petrochemicals like HDPE and LLDPE and leasing bandwidth in Telecom sector. GAIL has extended its presence in Power, Liquefied Natural Gas (LNG) re-gasification, City Gas Distribution and Exploration & Production areas through equity and joint venture participations. GAIL registered a turnover of US$7.9 billion and profit after tax of US$708 million for the year 2011-12.
LNG World News Staff, September 3, 2012